Correlation Between 037389BE2 and InfuSystems Holdings

Can any of the company-specific risk be diversified away by investing in both 037389BE2 and InfuSystems Holdings 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 037389BE2 and InfuSystems Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AON P and InfuSystems Holdings, you can compare the effects of market volatilities on 037389BE2 and InfuSystems Holdings 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 037389BE2 with a short position of InfuSystems Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 037389BE2 and InfuSystems Holdings.

Diversification Opportunities for 037389BE2 and InfuSystems Holdings

-0.11

Correlation Coefficient

037389BE2  InfuSystems Holdings

Good diversification

The 3 months correlation between 037389BE2 and InfuSystems is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding AON P and InfuSystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfuSystems Holdings and 037389BE2 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 AON P are associated (or correlated) with InfuSystems Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfuSystems Holdings has no effect on the direction of 037389BE2 i.e., 037389BE2 and InfuSystems Holdings go up and down completely randomly.

Pair Corralation between 037389BE2 and InfuSystems Holdings

Assuming the 90 days trading horizon AON P is expected to generate 0.2 times more return on investment than InfuSystems Holdings. However, AON P is 4.96 times less risky than InfuSystems Holdings. It trades about -0.22 of its potential returns per unit of risk. InfuSystems Holdings is currently generating about -0.16 per unit of risk. If you would invest  9,088  in AON P on October 9, 2024 and sell it today you would lose (264.00) from holding AON P or give up 2.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

AON P  vs.  InfuSystems Holdings

037389BE2

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AON P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 037389BE2 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

InfuSystems Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InfuSystems Holdings are ranked lower than 8 (%) 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.

Pair Trading with 037389BE2 and InfuSystems Holdings

The main advantage of trading using opposite 037389BE2 and InfuSystems Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 037389BE2 position performs unexpectedly, InfuSystems Holdings 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 InfuSystems Holdings will offset losses from the drop in InfuSystems Holdings' long position.

The idea behind AON P and InfuSystems Holdings 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.