Correlation Between Internet Infinity and Innovative Payment

Can any of the company-specific risk be diversified away by investing in both Internet Infinity and Innovative Payment 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 Internet Infinity and Innovative Payment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Internet Infinity and Innovative Payment Solutions, you can compare the effects of market volatilities on Internet Infinity and Innovative Payment 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 Internet Infinity with a short position of Innovative Payment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Infinity and Innovative Payment.

Diversification Opportunities for Internet Infinity and Innovative Payment

-0.09

Correlation Coefficient

Internet Infinity  Innovative Payment

Good diversification

The 3 months correlation between Internet and Innovative is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Internet Infinity and Innovative Payment Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Payment and Internet Infinity 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 Internet Infinity are associated (or correlated) with Innovative Payment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Payment has no effect on the direction of Internet Infinity i.e., Internet Infinity and Innovative Payment go up and down completely randomly.

Pair Corralation between Internet Infinity and Innovative Payment

Given the investment horizon of 90 days Internet Infinity is expected to generate 6.18 times less return on investment than Innovative Payment. But when comparing it to its historical volatility, Internet Infinity is 2.0 times less risky than Innovative Payment. It trades about 0.01 of its potential returns per unit of risk. Innovative Payment Solutions is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Innovative Payment Solutions on October 8, 2024 and sell it today you would lose (10.80) from holding Innovative Payment Solutions or give up 63.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.94%
Values	Daily Returns

Internet Infinity  vs.  Innovative Payment Solutions

Internet Infinity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Internet Infinity 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 nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Innovative Payment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Innovative Payment Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly fragile basic indicators, Innovative Payment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Internet Infinity and Innovative Payment

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

The idea behind Internet Infinity and Innovative Payment Solutions 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.