Correlation Between InfuSystems Holdings and Processa Pharmaceuticals

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

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

Diversification Opportunities for InfuSystems Holdings and Processa Pharmaceuticals

0.1

Correlation Coefficient

InfuSystems Holdings  Processa Pharmaceuticals

Average diversification

The 3 months correlation between InfuSystems and Processa is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and Processa Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Processa Pharmaceuticals 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 Processa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Processa Pharmaceuticals has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and Processa Pharmaceuticals go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and Processa Pharmaceuticals

Given the investment horizon of 90 days InfuSystems Holdings is expected to generate 1.1 times less return on investment than Processa Pharmaceuticals. But when comparing it to its historical volatility, InfuSystems Holdings is 2.7 times less risky than Processa Pharmaceuticals. It trades about 0.11 of its potential returns per unit of risk. Processa Pharmaceuticals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Processa Pharmaceuticals on April 27, 2025 and sell it today you would earn a total of  0.00  from holding Processa Pharmaceuticals or generate 0.0% return on investment over 90 days.

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

InfuSystems Holdings  vs.  Processa Pharmaceuticals

InfuSystems Holdings

Risk-Adjusted Performance

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.

Processa Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Processa Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Processa Pharmaceuticals sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InfuSystems Holdings and Processa Pharmaceuticals

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

The idea behind InfuSystems Holdings and Processa Pharmaceuticals 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.