Correlation Between Infraset Public and Nex Point

Can any of the company-specific risk be diversified away by investing in both Infraset Public and Nex Point 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 Infraset Public and Nex Point into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infraset Public and Nex Point Public, you can compare the effects of market volatilities on Infraset Public and Nex Point 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 Infraset Public with a short position of Nex Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infraset Public and Nex Point.

Diversification Opportunities for Infraset Public and Nex Point

-0.47

Correlation Coefficient

Infraset Public  Nex Point

Very good diversification

The 3 months correlation between Infraset and Nex is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Infraset Public and Nex Point Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nex Point Public and Infraset Public 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 Infraset Public are associated (or correlated) with Nex Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nex Point Public has no effect on the direction of Infraset Public i.e., Infraset Public and Nex Point go up and down completely randomly.

Pair Corralation between Infraset Public and Nex Point

Assuming the 90 days trading horizon Infraset Public is expected to under-perform the Nex Point. But the stock apears to be less risky and, when comparing its historical volatility, Infraset Public is 1.87 times less risky than Nex Point. The stock trades about -0.18 of its potential returns per unit of risk. The Nex Point Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  64.00  in Nex Point Public on December 30, 2024 and sell it today you would lose (1.00) from holding Nex Point Public or give up 1.56% of portfolio value over 90 days.

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

Infraset Public  vs.  Nex Point Public

Infraset Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infraset Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Nex Point Public

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nex Point Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Nex Point may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Infraset Public and Nex Point

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

The idea behind Infraset Public and Nex Point Public 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.