Correlation Between InfuSystems Holdings and Latamgrowth SPAC

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

By analyzing existing cross correlation between InfuSystems Holdings and Latamgrowth SPAC Unit, you can compare the effects of market volatilities on InfuSystems Holdings and Latamgrowth SPAC 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 Latamgrowth SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfuSystems Holdings and Latamgrowth SPAC.

Diversification Opportunities for InfuSystems Holdings and Latamgrowth SPAC

-0.06

Correlation Coefficient

InfuSystems Holdings  Latamgrowth SPAC

Good diversification

The 3 months correlation between InfuSystems and Latamgrowth is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and Latamgrowth SPAC Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latamgrowth SPAC Unit 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 Latamgrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latamgrowth SPAC Unit has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and Latamgrowth SPAC go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and Latamgrowth SPAC

Given the investment horizon of 90 days InfuSystems Holdings is expected to generate 0.77 times more return on investment than Latamgrowth SPAC. However, InfuSystems Holdings is 1.3 times less risky than Latamgrowth SPAC. It trades about 0.12 of its potential returns per unit of risk. Latamgrowth SPAC Unit is currently generating about 0.02 per unit of risk. If you would invest  642.00  in InfuSystems Holdings on October 26, 2024 and sell it today you would earn a total of  171.00  from holding InfuSystems Holdings or generate 26.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

InfuSystems Holdings  vs.  Latamgrowth SPAC Unit

InfuSystems Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InfuSystems Holdings are ranked lower than 9 (%) 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.

Latamgrowth SPAC Unit

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Latamgrowth SPAC Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unsteady technical and fundamental indicators, Latamgrowth SPAC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with InfuSystems Holdings and Latamgrowth SPAC

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

The idea behind InfuSystems Holdings and Latamgrowth SPAC Unit 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.