Correlation Between Infineon Technologies and Perficient

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Can any of the company-specific risk be diversified away by investing in both Infineon Technologies and Perficient 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 Infineon Technologies and Perficient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infineon Technologies AG and Perficient, you can compare the effects of market volatilities on Infineon Technologies and Perficient 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 Infineon Technologies with a short position of Perficient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infineon Technologies and Perficient.

Diversification Opportunities for Infineon Technologies and Perficient

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Infineon and Perficient is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Infineon Technologies AG and Perficient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perficient and Infineon Technologies 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 Infineon Technologies AG are associated (or correlated) with Perficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perficient has no effect on the direction of Infineon Technologies i.e., Infineon Technologies and Perficient go up and down completely randomly.

Pair Corralation between Infineon Technologies and Perficient

Assuming the 90 days horizon Infineon Technologies AG is expected to generate 1.11 times more return on investment than Perficient. However, Infineon Technologies is 1.11 times more volatile than Perficient. It trades about 0.54 of its potential returns per unit of risk. Perficient is currently generating about 0.2 per unit of risk. If you would invest  2,419  in Infineon Technologies AG on September 4, 2022 and sell it today you would earn a total of  1,006  from holding Infineon Technologies AG or generate 41.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Infineon Technologies AG  vs.  Perficient

 Performance (%) 
       Timeline  
Infineon Technologies 
Infineon Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Infineon Technologies AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Infineon Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Infineon Price Channel

Perficient 
Perficient Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Perficient are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Perficient is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Perficient Price Channel

Infineon Technologies and Perficient Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Infineon Technologies and Perficient

The main advantage of trading using opposite Infineon Technologies and Perficient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infineon Technologies position performs unexpectedly, Perficient 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 Perficient will offset losses from the drop in Perficient's long position.
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The idea behind Infineon Technologies AG and Perficient 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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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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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