Correlation Between Infosys and Gartner
Can any of the company-specific risk be diversified away by investing in both Infosys and Gartner 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 Gartner 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 Gartner, you can compare the effects of market volatilities on Infosys and Gartner 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 Gartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Gartner.
Diversification Opportunities for Infosys and Gartner
Very good diversification
The 3 months correlation between Infosys and Gartner is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and Gartner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gartner 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 Gartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gartner has no effect on the direction of Infosys i.e., Infosys and Gartner go up and down completely randomly.
Pair Corralation between Infosys and Gartner
Given the investment horizon of 90 days Infosys Ltd ADR is expected to under-perform the Gartner. In addition to that, Infosys is 1.23 times more volatile than Gartner. It trades about -0.45 of its total potential returns per unit of risk. Gartner is currently generating about -0.27 per unit of volatility. If you would invest 48,028 in Gartner on January 20, 2024 and sell it today you would lose (3,067) from holding Gartner or give up 6.39% 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. Gartner
Performance |
| Timeline |
| Infosys Ltd ADR |
| Gartner |
Infosys and Gartner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Gartner
The main advantage of trading using opposite Infosys and Gartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Gartner 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 Gartner will offset losses from the drop in Gartner's long position.| Infosys vs. Information Services Group | Infosys vs. Home Bancorp | Infosys vs. CRA International | Infosys vs. Aquagold International |
| Gartner vs. Information Services Group | Gartner vs. Home Bancorp | Gartner vs. CRA International | Gartner vs. Aquagold International |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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