Correlation Between Cognex and Infinity Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Cognex and Infinity 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 Cognex and Infinity Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognex and Infinity Pharmaceuticals, you can compare the effects of market volatilities on Cognex and Infinity 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 Cognex with a short position of Infinity Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognex and Infinity Pharmaceuticals.
Diversification Opportunities for Cognex and Infinity Pharmaceuticals
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cognex and Infinity is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cognex and Infinity Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinity Pharmaceuticals and Cognex 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 Cognex are associated (or correlated) with Infinity Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinity Pharmaceuticals has no effect on the direction of Cognex i.e., Cognex and Infinity Pharmaceuticals go up and down completely randomly.
Pair Corralation between Cognex and Infinity Pharmaceuticals
Given the investment horizon of 90 days Cognex is expected to generate 0.25 times more return on investment than Infinity Pharmaceuticals. However, Cognex is 3.95 times less risky than Infinity Pharmaceuticals. It trades about -0.01 of its potential returns per unit of risk. Infinity Pharmaceuticals is currently generating about -0.04 per unit of risk. If you would invest 5,367 in Cognex on January 26, 2024 and sell it today you would lose (1,414) from holding Cognex or give up 26.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 68.89% |
| Values | Daily Returns |
Cognex vs. Infinity Pharmaceuticals
Performance |
| Timeline |
| Cognex |
| Infinity Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cognex and Infinity Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognex and Infinity Pharmaceuticals
The main advantage of trading using opposite Cognex and Infinity Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognex position performs unexpectedly, Infinity 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 Infinity Pharmaceuticals will offset losses from the drop in Infinity Pharmaceuticals' long position.| Cognex vs. Teledyne Technologies Incorporated | Cognex vs. ESCO Technologies | Cognex vs. MKS Instruments | Cognex vs. Sensata Technologies Holding |
| Infinity Pharmaceuticals vs. NextCure | Infinity Pharmaceuticals vs. Chimerix | Infinity Pharmaceuticals vs. Eledon Pharmaceuticals | Infinity Pharmaceuticals vs. CytomX Therapeutics |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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