Correlation Between SGF Capital and Infraset Public

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

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

Diversification Opportunities for SGF Capital and Infraset Public

-0.66

Correlation Coefficient

SGF Capital  Infraset Public

Excellent diversification

The 3 months correlation between SGF and Infraset is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SGF Capital Public and Infraset Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infraset Public and SGF Capital 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 SGF Capital Public are associated (or correlated) with Infraset Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infraset Public has no effect on the direction of SGF Capital i.e., SGF Capital and Infraset Public go up and down completely randomly.

Pair Corralation between SGF Capital and Infraset Public

Assuming the 90 days trading horizon SGF Capital Public is expected to under-perform the Infraset Public. But the stock apears to be less risky and, when comparing its historical volatility, SGF Capital Public is 1.44 times less risky than Infraset Public. The stock trades about -0.11 of its potential returns per unit of risk. The Infraset Public is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  228.00  in Infraset Public on September 29, 2024 and sell it today you would earn a total of  88.00  from holding Infraset Public or generate 38.6% return on investment over 90 days.

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

SGF Capital Public  vs.  Infraset Public

SGF Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SGF Capital Public 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 technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Infraset Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Infraset Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Infraset Public sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SGF Capital and Infraset Public

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

The idea behind SGF Capital Public and Infraset 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.