Correlation Between InfuSystems Holdings and 037389BE2

Can any of the company-specific risk be diversified away by investing in both InfuSystems Holdings and 037389BE2 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 037389BE2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between InfuSystems Holdings and AON P, you can compare the effects of market volatilities on InfuSystems Holdings and 037389BE2 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 037389BE2. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfuSystems Holdings and 037389BE2.

Diversification Opportunities for InfuSystems Holdings and 037389BE2

-0.11

Correlation Coefficient

InfuSystems Holdings  037389BE2

Good diversification

The 3 months correlation between InfuSystems and 037389BE2 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and AON P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 037389BE2 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 037389BE2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 037389BE2 has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and 037389BE2 go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and 037389BE2

Given the investment horizon of 90 days InfuSystems Holdings is expected to under-perform the 037389BE2. In addition to that, InfuSystems Holdings is 4.96 times more volatile than AON P. It trades about -0.16 of its total potential returns per unit of risk. AON P is currently generating about -0.22 per unit of volatility. If you would invest  9,088  in AON P on October 9, 2024 and sell it today you would lose (264.00) from holding AON P or give up 2.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

InfuSystems Holdings  vs.  AON P

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.

037389BE2

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AON P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 037389BE2 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 037389BE2

The main advantage of trading using opposite InfuSystems Holdings and 037389BE2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfuSystems Holdings position performs unexpectedly, 037389BE2 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 037389BE2 will offset losses from the drop in 037389BE2's long position.

The idea behind InfuSystems Holdings and AON P 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.