Correlation Between Infimer and Nice

Can any of the company-specific risk be diversified away by investing in both Infimer and Nice 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 Infimer and Nice into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infimer and Nice, you can compare the effects of market volatilities on Infimer and Nice 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 Infimer with a short position of Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infimer and Nice.

Diversification Opportunities for Infimer and Nice

-0.35

Correlation Coefficient

Infimer  Nice

Very good diversification

The 3 months correlation between Infimer and Nice is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Infimer and Nice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice and Infimer 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 Infimer are associated (or correlated) with Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice has no effect on the direction of Infimer i.e., Infimer and Nice go up and down completely randomly.

Pair Corralation between Infimer and Nice

Assuming the 90 days trading horizon Infimer is expected to generate 46.3 times more return on investment than Nice. However, Infimer is 46.3 times more volatile than Nice. It trades about 0.15 of its potential returns per unit of risk. Nice is currently generating about -0.17 per unit of risk. If you would invest  200.00  in Infimer on December 5, 2024 and sell it today you would earn a total of  10,420  from holding Infimer or generate 5210.0% return on investment over 90 days.

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

Infimer  vs.  Nice

Infimer

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Infimer are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Infimer sustained solid returns over the last few months and may actually be approaching a breakup point.

Nice

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nice has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Infimer and Nice

The main advantage of trading using opposite Infimer and Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infimer position performs unexpectedly, Nice 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 Nice will offset losses from the drop in Nice's long position.

The idea behind Infimer and Nice 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.