Correlation Between Infrastructure Fund and Quantex Fund

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

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

Diversification Opportunities for Infrastructure Fund and Quantex Fund

0.86

Correlation Coefficient

Infrastructure Fund  Quantex Fund

Very poor diversification

The 3 months correlation between Infrastructure and Quantex is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Infrastructure Fund Retail and Quantex Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantex Fund Retail and Infrastructure Fund 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 Infrastructure Fund Retail are associated (or correlated) with Quantex Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantex Fund Retail has no effect on the direction of Infrastructure Fund i.e., Infrastructure Fund and Quantex Fund go up and down completely randomly.

Pair Corralation between Infrastructure Fund and Quantex Fund

Assuming the 90 days horizon Infrastructure Fund Retail is expected to under-perform the Quantex Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Infrastructure Fund Retail is 3.5 times less risky than Quantex Fund. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Quantex Fund Retail is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,586  in Quantex Fund Retail on February 20, 2025 and sell it today you would lose (19.00) from holding Quantex Fund Retail or give up 0.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Infrastructure Fund Retail  vs.  Quantex Fund Retail

Infrastructure Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infrastructure Fund Retail has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Infrastructure Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Quantex Fund Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quantex Fund Retail has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Quantex Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Infrastructure Fund and Quantex Fund

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

The idea behind Infrastructure Fund Retail and Quantex Fund Retail 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.