Correlation Between InfuSystems Holdings and JIN MEDICAL

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

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

Diversification Opportunities for InfuSystems Holdings and JIN MEDICAL

-0.84

Correlation Coefficient

InfuSystems Holdings  JIN MEDICAL

Pay attention - limited upside

The 3 months correlation between InfuSystems and JIN is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and JIN MEDICAL INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIN MEDICAL INTERNATIONAL 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 JIN MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIN MEDICAL INTERNATIONAL has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and JIN MEDICAL go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and JIN MEDICAL

Given the investment horizon of 90 days InfuSystems Holdings is expected to generate 0.71 times more return on investment than JIN MEDICAL. However, InfuSystems Holdings is 1.4 times less risky than JIN MEDICAL. It trades about 0.37 of its potential returns per unit of risk. JIN MEDICAL INTERNATIONAL is currently generating about -0.45 per unit of risk. If you would invest  613.00  in InfuSystems Holdings on August 31, 2024 and sell it today you would earn a total of  273.00  from holding InfuSystems Holdings or generate 44.54% return on investment over 90 days.

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

InfuSystems Holdings  vs.  JIN MEDICAL INTERNATIONAL

InfuSystems Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in InfuSystems Holdings are ranked lower than 11 (%) 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.

JIN MEDICAL INTERNATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JIN MEDICAL INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with InfuSystems Holdings and JIN MEDICAL

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

The idea behind InfuSystems Holdings and JIN MEDICAL INTERNATIONAL 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.