Correlation Between Infosys and Jindal Steel
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By analyzing existing cross correlation between Infosys Limited and Jindal Steel Power, you can compare the effects of market volatilities on Infosys and Jindal Steel 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 Infosys with a short position of Jindal Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Jindal Steel.
Diversification Opportunities for Infosys and Jindal Steel
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Infosys and Jindal is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Jindal Steel Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Steel Power and Infosys 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 Infosys Limited are associated (or correlated) with Jindal Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Steel Power has no effect on the direction of Infosys i.e., Infosys and Jindal Steel go up and down completely randomly.
Pair Corralation between Infosys and Jindal Steel
Assuming the 90 days trading horizon Infosys Limited is expected to generate 0.87 times more return on investment than Jindal Steel. However, Infosys Limited is 1.15 times less risky than Jindal Steel. It trades about 0.16 of its potential returns per unit of risk. Jindal Steel Power is currently generating about -0.04 per unit of risk. If you would invest 141,400 in Infosys Limited on September 3, 2024 and sell it today you would earn a total of 44,385 from holding Infosys Limited or generate 31.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Infosys Limited vs. Jindal Steel Power
Performance |
| Timeline |
| Infosys Limited |
| Jindal Steel Power |
Infosys and Jindal Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Jindal Steel
The main advantage of trading using opposite Infosys and Jindal Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Jindal Steel 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 Jindal Steel will offset losses from the drop in Jindal Steel's long position.| Infosys vs. Jindal Steel Power | Infosys vs. Embassy Office Parks | Infosys vs. Archean Chemical Industries | Infosys vs. Mahamaya Steel Industries |
| Jindal Steel vs. Computer Age Management | Jindal Steel vs. Paramount Communications Limited | Jindal Steel vs. Ortel Communications Limited | Jindal Steel vs. Hindustan Foods Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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