Correlation Between Hackett and Infosys
Can any of the company-specific risk be diversified away by investing in both Hackett 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 Hackett and Infosys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hackett Group and Infosys Ltd ADR, you can compare the effects of market volatilities on Hackett 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 Hackett with a short position of Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hackett and Infosys.
Diversification Opportunities for Hackett and Infosys
Good diversification
The 3 months correlation between Hackett and Infosys is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding The Hackett Group and Infosys Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Ltd ADR and Hackett 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 The Hackett Group 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 Ltd ADR has no effect on the direction of Hackett i.e., Hackett and Infosys go up and down completely randomly.
Pair Corralation between Hackett and Infosys
Given the investment horizon of 90 days The Hackett Group is expected to generate 1.21 times more return on investment than Infosys. However, Hackett is 1.21 times more volatile than Infosys Ltd ADR. It trades about 0.08 of its potential returns per unit of risk. Infosys Ltd ADR is currently generating about 0.08 per unit of risk. If you would invest 2,005 in The Hackett Group on September 2, 2024 and sell it today you would earn a total of 1,129 from holding The Hackett Group or generate 56.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hackett Group vs. Infosys Ltd ADR
Performance |
| Timeline |
| Hackett Group |
| Infosys Ltd ADR |
Hackett and Infosys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hackett and Infosys
The main advantage of trading using opposite Hackett and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hackett 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.| Hackett vs. Information Services Group | Hackett vs. Home Bancorp | Hackett vs. Heritage Financial | Hackett vs. CRA International |
| Infosys vs. FiscalNote Holdings | Infosys vs. Innodata | Infosys vs. Aurora Innovation | Infosys vs. Conduent |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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