Correlation Between Infosys and Sambhaav Media

Can any of the company-specific risk be diversified away by investing in both Infosys and Sambhaav Media 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 Sambhaav Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infosys Limited and Sambhaav Media Limited, you can compare the effects of market volatilities on Infosys and Sambhaav Media 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 Sambhaav Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Sambhaav Media.

Diversification Opportunities for Infosys and Sambhaav Media

0.53

Correlation Coefficient

Infosys  Sambhaav Media

Very weak diversification

The 3 months correlation between Infosys and Sambhaav is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Sambhaav Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambhaav Media 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 Sambhaav Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambhaav Media has no effect on the direction of Infosys i.e., Infosys and Sambhaav Media go up and down completely randomly.

Pair Corralation between Infosys and Sambhaav Media

Assuming the 90 days trading horizon Infosys is expected to generate 3.02 times less return on investment than Sambhaav Media. But when comparing it to its historical volatility, Infosys Limited is 2.63 times less risky than Sambhaav Media. It trades about 0.07 of its potential returns per unit of risk. Sambhaav Media Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  270.00  in Sambhaav Media Limited on October 24, 2024 and sell it today you would earn a total of  505.00  from holding Sambhaav Media Limited or generate 187.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.51%
Values	Daily Returns

Infosys Limited  vs.  Sambhaav Media Limited

Infosys Limited

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Infosys Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Infosys is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Sambhaav Media

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sambhaav Media Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Sambhaav Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infosys and Sambhaav Media

The main advantage of trading using opposite Infosys and Sambhaav Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Sambhaav Media 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 Sambhaav Media will offset losses from the drop in Sambhaav Media's long position.

The idea behind Infosys Limited and Sambhaav Media 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.