Correlation Between POWERGRID Infrastructure and Infosys
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By analyzing existing cross correlation between POWERGRID Infrastructure Investment and Infosys Limited, you can compare the effects of market volatilities on POWERGRID Infrastructure and Infosys 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 POWERGRID Infrastructure with a short position of Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWERGRID Infrastructure and Infosys.
Diversification Opportunities for POWERGRID Infrastructure and Infosys
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POWERGRID and Infosys is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding POWERGRID Infrastructure Inves and Infosys Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Limited and POWERGRID Infrastructure 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 POWERGRID Infrastructure Investment are associated (or correlated) with Infosys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infosys Limited has no effect on the direction of POWERGRID Infrastructure i.e., POWERGRID Infrastructure and Infosys go up and down completely randomly.
Pair Corralation between POWERGRID Infrastructure and Infosys
Assuming the 90 days trading horizon POWERGRID Infrastructure Investment is expected to under-perform the Infosys. But the stock apears to be less risky and, when comparing its historical volatility, POWERGRID Infrastructure Investment is 2.13 times less risky than Infosys. The stock trades about -0.1 of its potential returns per unit of risk. The Infosys Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 148,180 in Infosys Limited on October 28, 2024 and sell it today you would earn a total of 39,365 from holding Infosys Limited or generate 26.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
POWERGRID Infrastructure Inves vs. Infosys Limited
Performance |
| Timeline |
| POWERGRID Infrastructure |
| Infosys Limited |
POWERGRID Infrastructure and Infosys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POWERGRID Infrastructure and Infosys
The main advantage of trading using opposite POWERGRID Infrastructure and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POWERGRID Infrastructure position performs unexpectedly, Infosys 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 Infosys will offset losses from the drop in Infosys' long position.The idea behind POWERGRID Infrastructure Investment and Infosys Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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