Can any of the company-specific risk be diversified away by investing in both Aditxt and InFintT Acquisition 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 Aditxt and InFintT Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aditxt Inc and InFintT Acquisition Corp, you can compare the effects of market volatilities on Aditxt and InFintT Acquisition 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 Aditxt with a short position of InFintT Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aditxt and InFintT Acquisition.
Diversification Opportunities for Aditxt and InFintT Acquisition
The 3 months correlation between Aditxt and InFintT is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aditxt Inc and InFintT Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InFintT Acquisition Corp and Aditxt 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 Aditxt Inc are associated (or correlated) with InFintT Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InFintT Acquisition Corp has no effect on the direction of Aditxt i.e., Aditxt and InFintT Acquisition go up and down completely randomly.
Pair Corralation between Aditxt and InFintT Acquisition
Given the investment horizon of 90 days Aditxt Inc is expected to under-perform the InFintT Acquisition. In addition to that, Aditxt is 93.49 times more volatile than InFintT Acquisition Corp. It trades about -0.22 of its total potential returns per unit of risk. InFintT Acquisition Corp is currently generating about 0.52 per unit of volatility. If you would invest 1,111 in InFintT Acquisition Corp on September 5, 2023 and sell it today you would earn a total of 11.00 from holding InFintT Acquisition Corp or generate 0.99% return on investment over 90 days.
Over the last 90 days Aditxt Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Compared to the overall equity markets, risk-adjusted returns on investments in InFintT Acquisition Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, InFintT Acquisition is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the insiders.
Aditxt and InFintT Acquisition Volatility Contrast
Predicted Return Density
Pair Trading with Aditxt and InFintT Acquisition
The main advantage of trading using opposite Aditxt and InFintT Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aditxt position performs unexpectedly, InFintT Acquisition 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 InFintT Acquisition will offset losses from the drop in InFintT Acquisition's long position.
The idea behind Aditxt Inc and InFintT Acquisition Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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