Correlation Between NET Power and InfuSystems Holdings

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

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

Diversification Opportunities for NET Power and InfuSystems Holdings

0.05

Correlation Coefficient

NET Power  InfuSystems Holdings

Significant diversification

The 3 months correlation between NET and InfuSystems is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NET Power and InfuSystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfuSystems Holdings and NET Power 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 NET Power 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 NET Power i.e., NET Power and InfuSystems Holdings go up and down completely randomly.

Pair Corralation between NET Power and InfuSystems Holdings

Given the investment horizon of 90 days NET Power is expected to generate 1.14 times less return on investment than InfuSystems Holdings. In addition to that, NET Power is 2.19 times more volatile than InfuSystems Holdings. It trades about 0.1 of its total potential returns per unit of risk. InfuSystems Holdings is currently generating about 0.26 per unit of volatility. If you would invest  519.00  in InfuSystems Holdings on May 25, 2025 and sell it today you would earn a total of  438.00  from holding InfuSystems Holdings or generate 84.39% return on investment over 90 days.

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

NET Power  vs.  InfuSystems Holdings

NET Power

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in NET Power are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, NET Power reported solid returns over the last few months and may actually be approaching a breakup point.

InfuSystems Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in InfuSystems Holdings are ranked lower than 20 (%) 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 NET Power and InfuSystems Holdings

The main advantage of trading using opposite NET Power and InfuSystems Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NET Power 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 NET Power 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.

Check out your portfolio center.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.