Correlation Between Infosys and Kontrol Technologies
Can any of the company-specific risk be diversified away by investing in both Infosys and Kontrol 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 Kontrol 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 Kontrol Technologies Corp, you can compare the effects of market volatilities on Infosys and Kontrol 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 Kontrol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Kontrol Technologies.
Diversification Opportunities for Infosys and Kontrol Technologies
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Infosys and Kontrol is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and Kontrol Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontrol Technologies Corp 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 Kontrol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontrol Technologies Corp has no effect on the direction of Infosys i.e., Infosys and Kontrol Technologies go up and down completely randomly.
Pair Corralation between Infosys and Kontrol Technologies
Given the investment horizon of 90 days Infosys is expected to generate 1.53 times less return on investment than Kontrol Technologies. But when comparing it to its historical volatility, Infosys Ltd ADR is 8.38 times less risky than Kontrol Technologies. It trades about 0.26 of its potential returns per unit of risk. Kontrol Technologies Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Kontrol Technologies Corp on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Kontrol Technologies Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infosys Ltd ADR vs. Kontrol Technologies Corp
Performance |
| Timeline |
| Infosys Ltd ADR |
| Kontrol Technologies Corp |
Infosys and Kontrol Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Kontrol Technologies
The main advantage of trading using opposite Infosys and Kontrol Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Kontrol 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 Kontrol Technologies will offset losses from the drop in Kontrol Technologies' long position.| Infosys vs. Cognizant Technology Solutions | Infosys vs. WNS Holdings | Infosys vs. CLARIVATE PLC | Infosys vs. Gartner |
| Kontrol Technologies vs. SEATech Ventures Corp | Kontrol Technologies vs. Xalles Holdings | Kontrol Technologies vs. GBT Technologies | Kontrol Technologies vs. Quisitive Technology Solutions |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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