Correlation Between InfuSystems Holdings and 00108WAF7

Can any of the company-specific risk be diversified away by investing in both InfuSystems Holdings and 00108WAF7 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 00108WAF7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between InfuSystems Holdings and AEP TEX INC, you can compare the effects of market volatilities on InfuSystems Holdings and 00108WAF7 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 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfuSystems Holdings and 00108WAF7.

Diversification Opportunities for InfuSystems Holdings and 00108WAF7

0.02

Correlation Coefficient

InfuSystems Holdings  00108WAF7

Significant diversification

The 3 months correlation between InfuSystems and 00108WAF7 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and AEP TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX INC 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 00108WAF7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX INC has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and 00108WAF7 go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and 00108WAF7

Given the investment horizon of 90 days InfuSystems Holdings is expected to under-perform the 00108WAF7. In addition to that, InfuSystems Holdings is 1.98 times more volatile than AEP TEX INC. It trades about -0.13 of its total potential returns per unit of risk. AEP TEX INC is currently generating about 0.03 per unit of volatility. If you would invest  7,190  in AEP TEX INC on December 27, 2024 and sell it today you would earn a total of  126.00  from holding AEP TEX INC or generate 1.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	81.67%
Values	Daily Returns

InfuSystems Holdings  vs.  AEP TEX INC

InfuSystems Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days InfuSystems Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

AEP TEX INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AEP TEX INC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 00108WAF7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with InfuSystems Holdings and 00108WAF7

The main advantage of trading using opposite InfuSystems Holdings and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfuSystems Holdings position performs unexpectedly, 00108WAF7 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 00108WAF7 will offset losses from the drop in 00108WAF7's long position.

The idea behind InfuSystems Holdings and AEP TEX INC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.