Correlation Between Infosys and Addtech AB
Can any of the company-specific risk be diversified away by investing in both Infosys and Addtech AB 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 Addtech AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infosys Limited and Addtech AB, you can compare the effects of market volatilities on Infosys and Addtech AB 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 Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Addtech AB.
Diversification Opportunities for Infosys and Addtech AB
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Infosys and Addtech is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB 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 Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Infosys i.e., Infosys and Addtech AB go up and down completely randomly.
Pair Corralation between Infosys and Addtech AB
Assuming the 90 days horizon Infosys Limited is expected to under-perform the Addtech AB. In addition to that, Infosys is 1.63 times more volatile than Addtech AB. It trades about -0.03 of its total potential returns per unit of risk. Addtech AB is currently generating about 0.11 per unit of volatility. If you would invest 2,660 in Addtech AB on November 8, 2024 and sell it today you would earn a total of 120.00 from holding Addtech AB or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infosys Limited vs. Addtech AB
Performance |
| Timeline |
| Infosys Limited |
| Addtech AB |
Infosys and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Addtech AB
The main advantage of trading using opposite Infosys and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Addtech AB 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 Addtech AB will offset losses from the drop in Addtech AB's long position.| Infosys vs. Highlight Communications AG | Infosys vs. Chunghwa Telecom Co | Infosys vs. UNIVERSAL MUSIC GROUP | Infosys vs. Ribbon Communications |
| Addtech AB vs. Hisense Home Appliances | Addtech AB vs. CITY OFFICE REIT | Addtech AB vs. Autohome ADR | Addtech AB vs. MCEWEN MINING INC |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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