Correlation Between Infosys and Air Lease
Can any of the company-specific risk be diversified away by investing in both Infosys and Air Lease 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 Infosys and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infosys Ltd ADR and Air Lease, you can compare the effects of market volatilities on Infosys and Air Lease 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 Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Air Lease.
Diversification Opportunities for Infosys and Air Lease
Good diversification
The 3 months correlation between Infosys and Air is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 Ltd ADR are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Infosys i.e., Infosys and Air Lease go up and down completely randomly.
Pair Corralation between Infosys and Air Lease
Given the investment horizon of 90 days Infosys Ltd ADR is expected to generate 0.73 times more return on investment than Air Lease. However, Infosys Ltd ADR is 1.38 times less risky than Air Lease. It trades about 0.15 of its potential returns per unit of risk. Air Lease is currently generating about 0.04 per unit of risk. If you would invest 1,666 in Infosys Ltd ADR on August 31, 2024 and sell it today you would earn a total of 541.00 from holding Infosys Ltd ADR or generate 32.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infosys Ltd ADR vs. Air Lease
Performance |
| Timeline |
| Infosys Ltd ADR |
| Air Lease |
Infosys and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Air Lease
The main advantage of trading using opposite Infosys and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| Infosys vs. Cognizant Technology Solutions | Infosys vs. WNS Holdings | Infosys vs. CLARIVATE PLC | Infosys vs. Gartner |
| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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