Correlation Between Infosys and CleanCore Solutions

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

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

Diversification Opportunities for Infosys and CleanCore Solutions

-0.23

Correlation Coefficient

Infosys  CleanCore Solutions

Very good diversification

The 3 months correlation between Infosys and CleanCore is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and CleanCore Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanCore Solutions 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 Ltd ADR are associated (or correlated) with CleanCore Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanCore Solutions has no effect on the direction of Infosys i.e., Infosys and CleanCore Solutions go up and down completely randomly.

Pair Corralation between Infosys and CleanCore Solutions

Given the investment horizon of 90 days Infosys Ltd ADR is expected to under-perform the CleanCore Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Infosys Ltd ADR is 5.65 times less risky than CleanCore Solutions. The stock trades about -0.06 of its potential returns per unit of risk. The CleanCore Solutions is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  128.00  in CleanCore Solutions on October 11, 2024 and sell it today you would lose (7.00) from holding CleanCore Solutions or give up 5.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Infosys Ltd ADR  vs.  CleanCore Solutions

Infosys Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infosys Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Infosys is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

CleanCore Solutions

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CleanCore Solutions are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, CleanCore Solutions exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infosys and CleanCore Solutions

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

The idea behind Infosys Ltd ADR and CleanCore Solutions 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..