Correlation Between Mindflair Plc and Infineon Technologies

Can any of the company-specific risk be diversified away by investing in both Mindflair Plc and Infineon Technologies 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 Mindflair Plc and Infineon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mindflair Plc and Infineon Technologies AG, you can compare the effects of market volatilities on Mindflair Plc and Infineon Technologies 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 Mindflair Plc with a short position of Infineon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mindflair Plc and Infineon Technologies.

Diversification Opportunities for Mindflair Plc and Infineon Technologies

-0.4

Correlation Coefficient

Mindflair Plc  Infineon Technologies

Very good diversification

The 3 months correlation between Mindflair and Infineon is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mindflair Plc and Infineon Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infineon Technologies and Mindflair Plc 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 Mindflair Plc are associated (or correlated) with Infineon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infineon Technologies has no effect on the direction of Mindflair Plc i.e., Mindflair Plc and Infineon Technologies go up and down completely randomly.

Pair Corralation between Mindflair Plc and Infineon Technologies

Assuming the 90 days trading horizon Mindflair Plc is expected to under-perform the Infineon Technologies. In addition to that, Mindflair Plc is 3.27 times more volatile than Infineon Technologies AG. It trades about -0.4 of its total potential returns per unit of risk. Infineon Technologies AG is currently generating about -0.3 per unit of volatility. If you would invest  3,327  in Infineon Technologies AG on October 8, 2024 and sell it today you would lose (243.00) from holding Infineon Technologies AG or give up 7.3% of portfolio value over 90 days.

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

Mindflair Plc  vs.  Infineon Technologies AG

Mindflair Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mindflair Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Infineon Technologies

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Infineon Technologies AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Infineon Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mindflair Plc and Infineon Technologies

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

The idea behind Mindflair Plc and Infineon Technologies AG 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.