Correlation Between GLG LIFE and Infosys
Can any of the company-specific risk be diversified away by investing in both GLG LIFE and Infosys 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 GLG LIFE and Infosys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLG LIFE TECH and Infosys Limited, you can compare the effects of market volatilities on GLG LIFE and Infosys 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 GLG LIFE with a short position of Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and Infosys.
Diversification Opportunities for GLG LIFE and Infosys
Pay attention - limited upside
The 3 months correlation between GLG and Infosys is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and Infosys Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Limited and GLG LIFE 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 GLG LIFE TECH are associated (or correlated) with Infosys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infosys Limited has no effect on the direction of GLG LIFE i.e., GLG LIFE and Infosys go up and down completely randomly.
Pair Corralation between GLG LIFE and Infosys
Assuming the 90 days trading horizon GLG LIFE TECH is expected to generate 3.24 times more return on investment than Infosys. However, GLG LIFE is 3.24 times more volatile than Infosys Limited. It trades about 0.06 of its potential returns per unit of risk. Infosys Limited is currently generating about 0.05 per unit of risk. If you would invest 1.35 in GLG LIFE TECH on October 29, 2024 and sell it today you would earn a total of 0.65 from holding GLG LIFE TECH or generate 48.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
GLG LIFE TECH vs. Infosys Limited
Performance |
| Timeline |
| GLG LIFE TECH |
| Infosys Limited |
GLG LIFE and Infosys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and Infosys
The main advantage of trading using opposite GLG LIFE and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE position performs unexpectedly, Infosys 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 Infosys will offset losses from the drop in Infosys' long position.| GLG LIFE vs. CITY OFFICE REIT | GLG LIFE vs. RYANAIR HLDGS ADR | GLG LIFE vs. alstria office REIT AG | GLG LIFE vs. CENTURIA OFFICE REIT |
| Infosys vs. SOUTHWEST AIRLINES | Infosys vs. MEDCAW INVESTMENTS LS 01 | Infosys vs. JAPAN AIRLINES | Infosys vs. Aegean Airlines SA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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