Correlation Between InfuSystems Holdings and 50247VAC3

Can any of the company-specific risk be diversified away by investing in both InfuSystems Holdings and 50247VAC3 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 50247VAC3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between InfuSystems Holdings and LYB INTL FIN, you can compare the effects of market volatilities on InfuSystems Holdings and 50247VAC3 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 50247VAC3. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfuSystems Holdings and 50247VAC3.

Diversification Opportunities for InfuSystems Holdings and 50247VAC3

-0.21

Correlation Coefficient

InfuSystems Holdings  50247VAC3

Very good diversification

The 3 months correlation between InfuSystems and 50247VAC3 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and LYB INTL FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTL FIN 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 50247VAC3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTL FIN has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and 50247VAC3 go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and 50247VAC3

Given the investment horizon of 90 days InfuSystems Holdings is expected to under-perform the 50247VAC3. But the stock apears to be less risky and, when comparing its historical volatility, InfuSystems Holdings is 32.55 times less risky than 50247VAC3. The stock trades about 0.0 of its potential returns per unit of risk. The LYB INTL FIN is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,094  in LYB INTL FIN on October 23, 2024 and sell it today you would lose (400.00) from holding LYB INTL FIN or give up 4.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.98%
Values	Daily Returns

InfuSystems Holdings  vs.  LYB INTL FIN

InfuSystems Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in InfuSystems Holdings are ranked lower than 6 (%) 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.

LYB INTL FIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB INTL FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 50247VAC3 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 50247VAC3

The main advantage of trading using opposite InfuSystems Holdings and 50247VAC3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfuSystems Holdings position performs unexpectedly, 50247VAC3 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 50247VAC3 will offset losses from the drop in 50247VAC3's long position.

The idea behind InfuSystems Holdings and LYB INTL FIN 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.