Correlation Between Infosys and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Infosys and NYSE Composite 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 NYSE Composite 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 NYSE Composite, you can compare the effects of market volatilities on Infosys and NYSE Composite 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 NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and NYSE Composite.
Diversification Opportunities for Infosys and NYSE Composite
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Infosys and NYSE is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite 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 NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Infosys i.e., Infosys and NYSE Composite go up and down completely randomly.
Pair Corralation between Infosys and NYSE Composite
Given the investment horizon of 90 days Infosys Ltd ADR is expected to generate 1.93 times more return on investment than NYSE Composite. However, Infosys is 1.93 times more volatile than NYSE Composite. It trades about -0.08 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.21 per unit of risk. If you would invest 2,336 in Infosys Ltd ADR on October 12, 2024 and sell it today you would lose (58.00) from holding Infosys Ltd ADR or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infosys Ltd ADR vs. NYSE Composite
Performance |
| Timeline |
Infosys and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Infosys Ltd ADR
Pair trading matchups for Infosys
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Infosys and NYSE Composite
The main advantage of trading using opposite Infosys and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.| Infosys vs. Cognizant Technology Solutions | Infosys vs. WNS Holdings | Infosys vs. CLARIVATE PLC | Infosys vs. Gartner |
| NYSE Composite vs. Infosys Ltd ADR | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Weibo Corp | NYSE Composite vs. SmartStop Self Storage |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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