Correlation Between VNET Group and Infosys
Can any of the company-specific risk be diversified away by investing in both VNET Group 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 VNET Group and Infosys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VNET Group DRC and Infosys Ltd ADR, you can compare the effects of market volatilities on VNET Group 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 VNET Group with a short position of Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of VNET Group and Infosys.
Diversification Opportunities for VNET Group and Infosys
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between VNET and Infosys is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding VNET Group DRC 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 VNET Group 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 VNET Group DRC 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 VNET Group i.e., VNET Group and Infosys go up and down completely randomly.
Pair Corralation between VNET Group and Infosys
Given the investment horizon of 90 days VNET Group DRC is expected to under-perform the Infosys. In addition to that, VNET Group is 3.06 times more volatile than Infosys Ltd ADR. It trades about -0.03 of its total potential returns per unit of risk. Infosys Ltd ADR is currently generating about 0.04 per unit of volatility. If you would invest 1,549 in Infosys Ltd ADR on January 25, 2024 and sell it today you would earn a total of 155.00 from holding Infosys Ltd ADR or generate 10.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
VNET Group DRC vs. Infosys Ltd ADR
Performance |
Timeline |
VNET Group DRC |
Infosys Ltd ADR |
VNET Group and Infosys Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VNET Group and Infosys
The main advantage of trading using opposite VNET Group and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNET Group 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.VNET Group vs. Accenture plc | VNET Group vs. CACI International | VNET Group vs. CDW Corp | VNET Group vs. Jack Henry Associates |
Infosys vs. Accenture plc | Infosys vs. CACI International | Infosys vs. CDW Corp | Infosys vs. Jack Henry Associates |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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