Correlation Between Infosys and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Infosys and Jacquet Metal 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 Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infosys Limited and Jacquet Metal Service, you can compare the effects of market volatilities on Infosys and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Jacquet Metal.
Diversification Opportunities for Infosys and Jacquet Metal
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Infosys and Jacquet is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Infosys i.e., Infosys and Jacquet Metal go up and down completely randomly.
Pair Corralation between Infosys and Jacquet Metal
Assuming the 90 days horizon Infosys Limited is expected to generate 1.45 times more return on investment than Jacquet Metal. However, Infosys is 1.45 times more volatile than Jacquet Metal Service. It trades about 0.04 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.13 per unit of risk. If you would invest 2,080 in Infosys Limited on November 6, 2024 and sell it today you would earn a total of 30.00 from holding Infosys Limited or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Infosys Limited vs. Jacquet Metal Service
Performance |
| Timeline |
| Infosys Limited |
| Jacquet Metal Service |
Infosys and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Jacquet Metal
The main advantage of trading using opposite Infosys and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| Infosys vs. Information Services International Dentsu | Infosys vs. Teradata Corp | Infosys vs. EITZEN CHEMICALS | Infosys vs. TIANDE CHEMICAL |
| Jacquet Metal vs. CARSALESCOM | Jacquet Metal vs. Easy Software AG | Jacquet Metal vs. Zoom Video Communications | Jacquet Metal vs. CarsalesCom |
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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