Correlation Between Cambridge Technology and Infosys
Can any of the company-specific risk be diversified away by investing in both Cambridge Technology 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 Cambridge Technology and Infosys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambridge Technology Enterprises and Infosys Limited, you can compare the effects of market volatilities on Cambridge Technology 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 Cambridge Technology with a short position of Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambridge Technology and Infosys.
Diversification Opportunities for Cambridge Technology and Infosys
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cambridge and Infosys is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cambridge Technology Enterpris and Infosys Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Limited and Cambridge Technology 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 Cambridge Technology Enterprises 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 Cambridge Technology i.e., Cambridge Technology and Infosys go up and down completely randomly.
Pair Corralation between Cambridge Technology and Infosys
Assuming the 90 days trading horizon Cambridge Technology Enterprises is expected to generate 2.36 times more return on investment than Infosys. However, Cambridge Technology is 2.36 times more volatile than Infosys Limited. It trades about 0.05 of its potential returns per unit of risk. Infosys Limited is currently generating about 0.05 per unit of risk. If you would invest 6,070 in Cambridge Technology Enterprises on October 11, 2024 and sell it today you would earn a total of 4,646 from holding Cambridge Technology Enterprises or generate 76.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Cambridge Technology Enterpris vs. Infosys Limited
Performance |
| Timeline |
| Cambridge Technology |
| Infosys Limited |
Cambridge Technology and Infosys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambridge Technology and Infosys
The main advantage of trading using opposite Cambridge Technology and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambridge Technology 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.| Cambridge Technology vs. Sunflag Iron And | Cambridge Technology vs. Mahamaya Steel Industries | Cambridge Technology vs. Jindal Steel Power | Cambridge Technology vs. Electrosteel Castings Limited |
| Infosys vs. Embassy Office Parks | Infosys vs. Syrma SGS Technology | Infosys vs. Sonata Software Limited | Infosys vs. Cambridge Technology Enterprises |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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