Correlation Between Infinity Pharmaceuticals and Dimension Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Infinity Pharmaceuticals and Dimension Therapeutics 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 Infinity Pharmaceuticals and Dimension Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinity Pharmaceuticals and Dimension Therapeutics, you can compare the effects of market volatilities on Infinity Pharmaceuticals and Dimension Therapeutics 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 Infinity Pharmaceuticals with a short position of Dimension Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinity Pharmaceuticals and Dimension Therapeutics.

Diversification Opportunities for Infinity Pharmaceuticals and Dimension Therapeutics

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Infinity and Dimension is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Infinity Pharmaceuticals and Dimension Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimension Therapeutics and Infinity Pharmaceuticals 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 Infinity Pharmaceuticals are associated (or correlated) with Dimension Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimension Therapeutics has no effect on the direction of Infinity Pharmaceuticals i.e., Infinity Pharmaceuticals and Dimension Therapeutics go up and down completely randomly.

Pair Corralation between Infinity Pharmaceuticals and Dimension Therapeutics

If you would invest (100.00) in Dimension Therapeutics on January 24, 2024 and sell it today you would earn a total of  100.00  from holding Dimension Therapeutics or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Infinity Pharmaceuticals  vs.  Dimension Therapeutics

 Performance 
       Timeline  
Infinity Pharmaceuticals 

Risk-Adjusted Performance

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Over the last 90 days Infinity Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Infinity Pharmaceuticals is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
Dimension Therapeutics 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Dimension Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Dimension Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Infinity Pharmaceuticals and Dimension Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Infinity Pharmaceuticals and Dimension Therapeutics

The main advantage of trading using opposite Infinity Pharmaceuticals and Dimension Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinity Pharmaceuticals position performs unexpectedly, Dimension Therapeutics 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 Dimension Therapeutics will offset losses from the drop in Dimension Therapeutics' long position.
The idea behind Infinity Pharmaceuticals and Dimension Therapeutics 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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