Correlation Between Infusion Brands and Vinda International

Can any of the company-specific risk be diversified away by investing in both Infusion Brands and Vinda International 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 Infusion Brands and Vinda International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infusion Brands International and Vinda International Holdings, you can compare the effects of market volatilities on Infusion Brands and Vinda International 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 Infusion Brands with a short position of Vinda International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infusion Brands and Vinda International.

Diversification Opportunities for Infusion Brands and Vinda International

1.0

Correlation Coefficient

Infusion Brands  Vinda International

No risk reduction

The 3 months correlation between Infusion and Vinda is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Infusion Brands International and Vinda International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinda International and Infusion Brands 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 Infusion Brands International are associated (or correlated) with Vinda International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinda International has no effect on the direction of Infusion Brands i.e., Infusion Brands and Vinda International go up and down completely randomly.

Pair Corralation between Infusion Brands and Vinda International

If you would invest  2,167  in Vinda International Holdings on February 8, 2024 and sell it today you would earn a total of  0.00  from holding Vinda International Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Infusion Brands International  vs.  Vinda International Holdings

Infusion Brands Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infusion Brands International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Infusion Brands is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Vinda International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Infusion Brands and Vinda International

The main advantage of trading using opposite Infusion Brands and Vinda International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infusion Brands position performs unexpectedly, Vinda International 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 Vinda International will offset losses from the drop in Vinda International's long position.

The idea behind Infusion Brands International and Vinda International Holdings 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.