Correlation Between Infinity Pharmaceuticals and Novartis
Can any of the company-specific risk be diversified away by investing in both Infinity Pharmaceuticals and Novartis 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 Novartis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinity Pharmaceuticals and Novartis AG ADR, you can compare the effects of market volatilities on Infinity Pharmaceuticals and Novartis 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 Novartis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinity Pharmaceuticals and Novartis.
Diversification Opportunities for Infinity Pharmaceuticals and Novartis
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Infinity and Novartis is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Infinity Pharmaceuticals and Novartis AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novartis AG ADR 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 Novartis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novartis AG ADR has no effect on the direction of Infinity Pharmaceuticals i.e., Infinity Pharmaceuticals and Novartis go up and down completely randomly.
Pair Corralation between Infinity Pharmaceuticals and Novartis
Given the investment horizon of 90 days Infinity Pharmaceuticals is expected to under-perform the Novartis. In addition to that, Infinity Pharmaceuticals is 10.86 times more volatile than Novartis AG ADR. It trades about -0.05 of its total potential returns per unit of risk. Novartis AG ADR is currently generating about 0.02 per unit of volatility. If you would invest 9,346 in Novartis AG ADR on January 26, 2024 and sell it today you would earn a total of 489.00 from holding Novartis AG ADR or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 38.31% |
| Values | Daily Returns |
Infinity Pharmaceuticals vs. Novartis AG ADR
Performance |
| Timeline |
| Infinity Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Novartis AG ADR |
Infinity Pharmaceuticals and Novartis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinity Pharmaceuticals and Novartis
The main advantage of trading using opposite Infinity Pharmaceuticals and Novartis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinity Pharmaceuticals position performs unexpectedly, Novartis 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 Novartis will offset losses from the drop in Novartis' long position.| Infinity Pharmaceuticals vs. NextCure | Infinity Pharmaceuticals vs. Chimerix | Infinity Pharmaceuticals vs. Eledon Pharmaceuticals | Infinity Pharmaceuticals vs. CytomX Therapeutics |
| Novartis vs. AstraZeneca PLC ADR | Novartis vs. GlaxoSmithKline PLC ADR | Novartis vs. Roche Holding Ltd | Novartis vs. Bristol Myers Squibb |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |