Correlation Between EnLink and Infosys

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

By analyzing existing cross correlation between EnLink Midstream Partners and Infosys Ltd ADR, you can compare the effects of market volatilities on EnLink 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 EnLink with a short position of Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnLink and Infosys.

Diversification Opportunities for EnLink and Infosys

0.34

Correlation Coefficient

EnLink  Infosys

Weak diversification

The 3 months correlation between EnLink and Infosys is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding EnLink Midstream Partners and Infosys Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Ltd ADR and EnLink 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 EnLink Midstream Partners 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 Ltd ADR has no effect on the direction of EnLink i.e., EnLink and Infosys go up and down completely randomly.

Pair Corralation between EnLink and Infosys

Assuming the 90 days trading horizon EnLink Midstream Partners is expected to generate 0.11 times more return on investment than Infosys. However, EnLink Midstream Partners is 9.03 times less risky than Infosys. It trades about 0.0 of its potential returns per unit of risk. Infosys Ltd ADR is currently generating about -0.22 per unit of risk. If you would invest  9,957  in EnLink Midstream Partners on December 29, 2024 and sell it today you would lose (3.00) from holding EnLink Midstream Partners or give up 0.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

EnLink Midstream Partners  vs.  Infosys Ltd ADR

EnLink Midstream Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days EnLink Midstream Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, EnLink is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Infosys Ltd ADR

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with EnLink and Infosys

The main advantage of trading using opposite EnLink and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnLink 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 EnLink Midstream Partners and Infosys Ltd ADR 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.