Correlation Between InfuSystems Holdings and ATRION

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

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

Diversification Opportunities for InfuSystems Holdings and ATRION

-0.15

Correlation Coefficient

InfuSystems Holdings  ATRION

Good diversification

The 3 months correlation between InfuSystems and ATRION is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and ATRION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRION 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 ATRION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRION has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and ATRION go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and ATRION

Given the investment horizon of 90 days InfuSystems Holdings is expected to generate 0.22 times more return on investment than ATRION. However, InfuSystems Holdings is 4.62 times less risky than ATRION. It trades about 0.0 of its potential returns per unit of risk. ATRION is currently generating about -0.16 per unit of risk. If you would invest  683.00  in InfuSystems Holdings on June 29, 2024 and sell it today you would lose (27.00) from holding InfuSystems Holdings or give up 3.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.68%
Values	Daily Returns

InfuSystems Holdings  vs.  ATRION

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 comparatively stable technical and fundamental indicators, InfuSystems Holdings is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

ATRION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATRION 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 basic indicators remain fairly strong which may send shares a bit higher in October 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with InfuSystems Holdings and ATRION

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

The idea behind InfuSystems Holdings and ATRION 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.