Correlation Between InfuSystems Holdings and Encision

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

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

Diversification Opportunities for InfuSystems Holdings and Encision

-0.52

Correlation Coefficient

InfuSystems Holdings  Encision

Excellent diversification

The 3 months correlation between InfuSystems and Encision is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and Encision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encision and InfuSystems Holdings 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 InfuSystems Holdings are associated (or correlated) with Encision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encision has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and Encision go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and Encision

If you would invest  46.00  in Encision on February 4, 2024 and sell it today you would earn a total of  0.00  from holding Encision or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

InfuSystems Holdings  vs.  Encision

InfuSystems Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days InfuSystems Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Encision

Risk-Adjusted Performance

0 of 100

Very Strong

Over the last 90 days Encision has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak forward indicators, Encision sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InfuSystems Holdings and Encision

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

The idea behind InfuSystems Holdings and Encision 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.