Correlation Between Infinera and Intellicheck Mobilisa

Can any of the company-specific risk be diversified away by investing in both Infinera and Intellicheck Mobilisa at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Infinera and Intellicheck Mobilisa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infinera and Intellicheck Mobilisa, you can compare the effects of market volatilities on Infinera and Intellicheck Mobilisa and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Infinera with a short position of Intellicheck Mobilisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinera and Intellicheck Mobilisa.

Diversification Opportunities for Infinera and Intellicheck Mobilisa

-0.63

Correlation Coefficient

Infinera  Intellicheck Mobilisa

Excellent diversification

The 3 months correlation between Infinera and Intellicheck is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Infinera and Intellicheck Mobilisa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellicheck Mobilisa and Infinera is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Infinera are associated (or correlated) with Intellicheck Mobilisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellicheck Mobilisa has no effect on the direction of Infinera i.e., Infinera and Intellicheck Mobilisa go up and down completely randomly.

Pair Corralation between Infinera and Intellicheck Mobilisa

Given the investment horizon of 90 days Infinera is expected to under-perform the Intellicheck Mobilisa. But the stock apears to be less risky and, when comparing its historical volatility, Infinera is 19.99 times less risky than Intellicheck Mobilisa. The stock trades about -0.16 of its potential returns per unit of risk. The Intellicheck Mobilisa is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  242.00  in Intellicheck Mobilisa on September 21, 2024 and sell it today you would earn a total of  43.00  from holding Intellicheck Mobilisa or generate 17.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Infinera  vs.  Intellicheck Mobilisa

Infinera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinera has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Infinera is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Intellicheck Mobilisa

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intellicheck Mobilisa are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Intellicheck Mobilisa displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infinera and Intellicheck Mobilisa

The main advantage of trading using opposite Infinera and Intellicheck Mobilisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinera position performs unexpectedly, Intellicheck Mobilisa can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Intellicheck Mobilisa will offset losses from the drop in Intellicheck Mobilisa's long position.

The idea behind Infinera and Intellicheck Mobilisa pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.