Correlation Between Infosys and Thoughtworks Holding
Can any of the company-specific risk be diversified away by investing in both Infosys and Thoughtworks Holding 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 Thoughtworks Holding 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 Thoughtworks Holding, you can compare the effects of market volatilities on Infosys and Thoughtworks Holding 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 Thoughtworks Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Thoughtworks Holding.
Diversification Opportunities for Infosys and Thoughtworks Holding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Infosys and Thoughtworks is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and Thoughtworks Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoughtworks 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 Thoughtworks Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoughtworks Holding has no effect on the direction of Infosys i.e., Infosys and Thoughtworks Holding go up and down completely randomly.
Pair Corralation between Infosys and Thoughtworks Holding
Given the investment horizon of 90 days Infosys Ltd ADR is expected to generate 0.38 times more return on investment than Thoughtworks Holding. However, Infosys Ltd ADR is 2.62 times less risky than Thoughtworks Holding. It trades about 0.03 of its potential returns per unit of risk. Thoughtworks Holding is currently generating about -0.02 per unit of risk. If you would invest 1,864 in Infosys Ltd ADR on August 24, 2024 and sell it today you would earn a total of 332.00 from holding Infosys Ltd ADR or generate 17.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.59% |
| Values | Daily Returns |
Infosys Ltd ADR vs. Thoughtworks Holding
Performance |
| Timeline |
| Infosys Ltd ADR |
| Thoughtworks Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Infosys and Thoughtworks Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Thoughtworks Holding
The main advantage of trading using opposite Infosys and Thoughtworks Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Thoughtworks Holding 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 Thoughtworks Holding will offset losses from the drop in Thoughtworks Holding's long position.| Infosys vs. Concentrix | Infosys vs. Accenture plc | Infosys vs. International Business Machines | Infosys vs. Cognizant Technology Solutions |
| Thoughtworks Holding vs. ExlService Holdings | Thoughtworks Holding vs. Genpact Limited | Thoughtworks Holding vs. ASGN Inc | Thoughtworks Holding vs. TTEC 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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