Correlation Between Infinity Pharmaceuticals and Durect
Can any of the company-specific risk be diversified away by investing in both Infinity Pharmaceuticals and Durect 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 Durect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinity Pharmaceuticals and Durect, you can compare the effects of market volatilities on Infinity Pharmaceuticals and Durect 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 Durect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinity Pharmaceuticals and Durect.
Diversification Opportunities for Infinity Pharmaceuticals and Durect
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Infinity and Durect is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Infinity Pharmaceuticals and Durect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Durect 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 Durect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Durect has no effect on the direction of Infinity Pharmaceuticals i.e., Infinity Pharmaceuticals and Durect go up and down completely randomly.
Pair Corralation between Infinity Pharmaceuticals and Durect
Given the investment horizon of 90 days Infinity Pharmaceuticals is expected to under-perform the Durect. In addition to that, Infinity Pharmaceuticals is 1.31 times more volatile than Durect. It trades about -0.04 of its total potential returns per unit of risk. Durect is currently generating about 0.0 per unit of volatility. If you would invest 490.00 in Durect on January 24, 2024 and sell it today you would lose (406.00) from holding Durect or give up 82.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 69.29% |
| Values | Daily Returns |
Infinity Pharmaceuticals vs. Durect
Performance |
| Timeline |
| Infinity Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Durect |
Infinity Pharmaceuticals and Durect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinity Pharmaceuticals and Durect
The main advantage of trading using opposite Infinity Pharmaceuticals and Durect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinity Pharmaceuticals position performs unexpectedly, Durect 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 Durect will offset losses from the drop in Durect's long position.| Infinity Pharmaceuticals vs. NextCure | Infinity Pharmaceuticals vs. Chimerix | Infinity Pharmaceuticals vs. Eledon Pharmaceuticals | Infinity Pharmaceuticals vs. CytomX Therapeutics |
| Durect vs. Silver Spike Investment | Durect vs. Alkermes Plc | Durect vs. Eagle Pharmaceuticals | Durect vs. Evotec SE ADR |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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