Correlation Between CDW and Infosys
Can any of the company-specific risk be diversified away by investing in both CDW 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 CDW and Infosys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corporation and Infosys Limited, you can compare the effects of market volatilities on CDW 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 CDW with a short position of Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW and Infosys.
Diversification Opportunities for CDW and Infosys
Excellent diversification
The 3 months correlation between CDW and Infosys is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp. and Infosys Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Limited and CDW 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 CDW Corporation 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 CDW i.e., CDW and Infosys go up and down completely randomly.
Pair Corralation between CDW and Infosys
Assuming the 90 days horizon CDW Corporation is expected to under-perform the Infosys. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corporation is 1.29 times less risky than Infosys. The stock trades about -0.08 of its potential returns per unit of risk. The Infosys Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,659 in Infosys Limited on September 23, 2024 and sell it today you would earn a total of 521.00 from holding Infosys Limited or generate 31.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp. vs. Infosys Limited
Performance |
| Timeline |
| CDW Corporation |
| Infosys Limited |
CDW and Infosys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW and Infosys
The main advantage of trading using opposite CDW and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW 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.| CDW vs. Accenture plc | CDW vs. International Business Machines | CDW vs. Infosys Limited | CDW vs. Cognizant Technology Solutions |
| Infosys vs. Accenture plc | Infosys vs. International Business Machines | Infosys vs. Cognizant Technology Solutions | Infosys vs. AMADEUS IT GRP |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |