Correlation Between Infosys and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both Infosys and Grocery Outlet 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 Grocery Outlet 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 Grocery Outlet Holding, you can compare the effects of market volatilities on Infosys and Grocery Outlet 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 Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Grocery Outlet.
Diversification Opportunities for Infosys and Grocery Outlet
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Infosys and Grocery is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and Grocery Outlet Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grocery Outlet Holding 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 Grocery Outlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grocery Outlet Holding has no effect on the direction of Infosys i.e., Infosys and Grocery Outlet go up and down completely randomly.
Pair Corralation between Infosys and Grocery Outlet
Given the investment horizon of 90 days Infosys Ltd ADR is expected to generate 0.5 times more return on investment than Grocery Outlet. However, Infosys Ltd ADR is 2.0 times less risky than Grocery Outlet. It trades about 0.08 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about -0.03 per unit of risk. If you would invest 1,709 in Infosys Ltd ADR on September 2, 2024 and sell it today you would earn a total of 498.00 from holding Infosys Ltd ADR or generate 29.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infosys Ltd ADR vs. Grocery Outlet Holding
Performance |
| Timeline |
| Infosys Ltd ADR |
| Grocery Outlet Holding |
Infosys and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Grocery Outlet
The main advantage of trading using opposite Infosys and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Grocery Outlet 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 Grocery Outlet will offset losses from the drop in Grocery Outlet's long position.| Infosys vs. FiscalNote Holdings | Infosys vs. Innodata | Infosys vs. Aurora Innovation | Infosys vs. Conduent |
| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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