Correlation Between Infinity Pharmaceuticals and American Express

Can any of the company-specific risk be diversified away by investing in both Infinity Pharmaceuticals and American Express 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 American Express into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infinity Pharmaceuticals and American Express, you can compare the effects of market volatilities on Infinity Pharmaceuticals and American Express 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 American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinity Pharmaceuticals and American Express.

Diversification Opportunities for Infinity Pharmaceuticals and American Express

-0.65

Correlation Coefficient

Infinity Pharmaceuticals  American Express

Excellent diversification

The 3 months correlation between Infinity and American is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Infinity Pharmaceuticals and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express 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 American Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Express has no effect on the direction of Infinity Pharmaceuticals i.e., Infinity Pharmaceuticals and American Express go up and down completely randomly.

Pair Corralation between Infinity Pharmaceuticals and American Express

If you would invest  22,533  in American Express on January 24, 2024 and sell it today you would earn a total of  1,363  from holding American Express or generate 6.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Infinity Pharmaceuticals  vs.  American Express

Infinity Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

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.

American Express

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, American Express reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infinity Pharmaceuticals and American Express

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

The idea behind Infinity Pharmaceuticals and American Express 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.