Correlation Between Infosys and JM Financial
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By analyzing existing cross correlation between Infosys Limited and JM Financial Limited, you can compare the effects of market volatilities on Infosys and JM Financial 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 JM Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and JM Financial.
Diversification Opportunities for Infosys and JM Financial
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Infosys and JMFINANCIL is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and JM Financial Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Financial Limited 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 JM Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JM Financial Limited has no effect on the direction of Infosys i.e., Infosys and JM Financial go up and down completely randomly.
Pair Corralation between Infosys and JM Financial
Assuming the 90 days trading horizon Infosys is expected to generate 1.97 times less return on investment than JM Financial. But when comparing it to its historical volatility, Infosys Limited is 2.15 times less risky than JM Financial. It trades about 0.13 of its potential returns per unit of risk. JM Financial Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 8,550 in JM Financial Limited on September 25, 2024 and sell it today you would earn a total of 4,089 from holding JM Financial Limited or generate 47.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Infosys Limited vs. JM Financial Limited
Performance |
| Timeline |
| Infosys Limited |
| JM Financial Limited |
Infosys and JM Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and JM Financial
The main advantage of trading using opposite Infosys and JM Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, JM Financial 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 JM Financial will offset losses from the drop in JM Financial's long position.| Infosys vs. Tamilnadu Telecommunication Limited | Infosys vs. Samhi Hotels Limited | Infosys vs. The Hi Tech Gears | Infosys vs. Paramount Communications Limited |
| JM Financial vs. Tata Consultancy Services | JM Financial vs. Quess Corp Limited | JM Financial vs. Reliance Industries Limited | JM Financial vs. Infosys 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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