Correlation Between Infosys and Praxis Home
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By analyzing existing cross correlation between Infosys Limited and Praxis Home Retail, you can compare the effects of market volatilities on Infosys and Praxis Home 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 Praxis Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Praxis Home.
Diversification Opportunities for Infosys and Praxis Home
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Infosys and Praxis is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Praxis Home Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Home Retail 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 Praxis Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Home Retail has no effect on the direction of Infosys i.e., Infosys and Praxis Home go up and down completely randomly.
Pair Corralation between Infosys and Praxis Home
Assuming the 90 days trading horizon Infosys is expected to generate 8.49 times less return on investment than Praxis Home. But when comparing it to its historical volatility, Infosys Limited is 2.56 times less risky than Praxis Home. It trades about 0.01 of its potential returns per unit of risk. Praxis Home Retail is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,140 in Praxis Home Retail on October 10, 2024 and sell it today you would earn a total of 42.00 from holding Praxis Home Retail or generate 1.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Infosys Limited vs. Praxis Home Retail
Performance |
Timeline |
Infosys Limited |
Praxis Home Retail |
Infosys and Praxis Home Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Infosys and Praxis Home
The main advantage of trading using opposite Infosys and Praxis Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Praxis Home 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 Praxis Home will offset losses from the drop in Praxis Home's long position.Infosys vs. Embassy Office Parks | Infosys vs. Syrma SGS Technology | Infosys vs. Sonata Software Limited | Infosys vs. Cambridge Technology Enterprises |
Praxis Home vs. UltraTech Cement Limited | Praxis Home vs. UFO Moviez India | Praxis Home vs. Agro Tech Foods | Praxis Home vs. Tree House Education |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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