Correlation Between Infosys and GBT Technologies
Can any of the company-specific risk be diversified away by investing in both Infosys and GBT Technologies 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 GBT Technologies 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 GBT Technologies, you can compare the effects of market volatilities on Infosys and GBT Technologies 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 GBT Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and GBT Technologies.
Diversification Opportunities for Infosys and GBT Technologies
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Infosys and GBT is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and GBT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBT Technologies 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 GBT Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBT Technologies has no effect on the direction of Infosys i.e., Infosys and GBT Technologies go up and down completely randomly.
Pair Corralation between Infosys and GBT Technologies
Given the investment horizon of 90 days Infosys is expected to generate 491.01 times less return on investment than GBT Technologies. But when comparing it to its historical volatility, Infosys Ltd ADR is 116.8 times less risky than GBT Technologies. It trades about 0.04 of its potential returns per unit of risk. GBT Technologies is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 0.05 in GBT Technologies on November 27, 2024 and sell it today you would lose (0.04) from holding GBT Technologies or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Infosys Ltd ADR vs. GBT Technologies
Performance |
| Timeline |
| Infosys Ltd ADR |
| GBT Technologies |
Infosys and GBT Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and GBT Technologies
The main advantage of trading using opposite Infosys and GBT Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, GBT Technologies 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 GBT Technologies will offset losses from the drop in GBT Technologies' long position.| Infosys vs. Cognizant Technology Solutions | Infosys vs. WNS Holdings | Infosys vs. CLARIVATE PLC | Infosys vs. Gartner |
| GBT Technologies vs. SEATech Ventures Corp | GBT Technologies vs. Alternet Systems | GBT Technologies vs. Crypto Co | GBT Technologies vs. Xalles Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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