Correlation Between Infosys and Atos SE
Can any of the company-specific risk be diversified away by investing in both Infosys and Atos SE 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 Atos SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infosys Limited and Atos SE, you can compare the effects of market volatilities on Infosys and Atos SE 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 Atos SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Atos SE.
Diversification Opportunities for Infosys and Atos SE
Good diversification
The 3 months correlation between Infosys and Atos is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Atos SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos SE 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 Limited are associated (or correlated) with Atos SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos SE has no effect on the direction of Infosys i.e., Infosys and Atos SE go up and down completely randomly.
Pair Corralation between Infosys and Atos SE
Assuming the 90 days horizon Infosys is expected to generate 1.95 times less return on investment than Atos SE. But when comparing it to its historical volatility, Infosys Limited is 3.2 times less risky than Atos SE. It trades about 0.05 of its potential returns per unit of risk. Atos SE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,197 in Atos SE on November 5, 2024 and sell it today you would lose (1,197) from holding Atos SE or give up 99.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infosys Limited vs. Atos SE
Performance |
| Timeline |
| Infosys Limited |
| Atos SE |
Infosys and Atos SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Atos SE
The main advantage of trading using opposite Infosys and Atos SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Atos SE 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 Atos SE will offset losses from the drop in Atos SE's long position.| Infosys vs. ADRIATIC METALS LS 013355 | Infosys vs. CarsalesCom | Infosys vs. Nippon Light Metal | Infosys vs. Transport International Holdings |
| Atos SE vs. SOLSTAD OFFSHORE NK | Atos SE vs. Verizon Communications | Atos SE vs. Solstad Offshore ASA | Atos SE vs. BW OFFSHORE LTD |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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