Correlation Between InfuSystems Holdings and FP Newspapers

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

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

Diversification Opportunities for InfuSystems Holdings and FP Newspapers

-0.4

Correlation Coefficient

InfuSystems Holdings  FP Newspapers

Very good diversification

The 3 months correlation between InfuSystems and FPNUF is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and FP Newspapers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FP Newspapers and InfuSystems Holdings 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 InfuSystems Holdings are associated (or correlated) with FP Newspapers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FP Newspapers has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and FP Newspapers go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and FP Newspapers

Given the investment horizon of 90 days InfuSystems Holdings is expected to generate 1.82 times more return on investment than FP Newspapers. However, InfuSystems Holdings is 1.82 times more volatile than FP Newspapers. It trades about 0.01 of its potential returns per unit of risk. FP Newspapers is currently generating about -0.04 per unit of risk. If you would invest  850.00  in InfuSystems Holdings on October 9, 2024 and sell it today you would lose (18.00) from holding InfuSystems Holdings or give up 2.12% of portfolio value over 90 days.

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

InfuSystems Holdings  vs.  FP Newspapers

InfuSystems Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InfuSystems Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, InfuSystems Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

FP Newspapers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FP Newspapers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with InfuSystems Holdings and FP Newspapers

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

The idea behind InfuSystems Holdings and FP Newspapers 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.