Correlation Between Infosys and WNS Holdings
Can any of the company-specific risk be diversified away by investing in both Infosys and WNS Holdings 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 WNS Holdings 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 WNS Holdings, you can compare the effects of market volatilities on Infosys and WNS Holdings 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 WNS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and WNS Holdings.
Diversification Opportunities for Infosys and WNS Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Infosys and WNS is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and WNS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WNS Holdings 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 WNS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WNS Holdings has no effect on the direction of Infosys i.e., Infosys and WNS Holdings go up and down completely randomly.
Pair Corralation between Infosys and WNS Holdings
Given the investment horizon of 90 days Infosys Ltd ADR is expected to under-perform the WNS Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Infosys Ltd ADR is 2.64 times less risky than WNS Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The WNS Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,079 in WNS Holdings on November 4, 2024 and sell it today you would earn a total of 1,046 from holding WNS Holdings or generate 20.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infosys Ltd ADR vs. WNS Holdings
Performance |
| Timeline |
| Infosys Ltd ADR |
| WNS Holdings |
Infosys and WNS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and WNS Holdings
The main advantage of trading using opposite Infosys and WNS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, WNS Holdings 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 WNS Holdings will offset losses from the drop in WNS Holdings' long position.| Infosys vs. Cognizant Technology Solutions | Infosys vs. WNS Holdings | Infosys vs. CLARIVATE PLC | Infosys vs. Gartner |
| WNS Holdings vs. Genpact Limited | WNS Holdings vs. ASGN Inc | WNS Holdings vs. CACI International | WNS Holdings vs. ExlService 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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