Correlation Between Infosys and National Storage
Can any of the company-specific risk be diversified away by investing in both Infosys and National Storage 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 National Storage 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 National Storage REIT, you can compare the effects of market volatilities on Infosys and National Storage 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 National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and National Storage.
Diversification Opportunities for Infosys and National Storage
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Infosys and National is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and National Storage REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storage REIT 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 National Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Storage REIT has no effect on the direction of Infosys i.e., Infosys and National Storage go up and down completely randomly.
Pair Corralation between Infosys and National Storage
Given the investment horizon of 90 days Infosys is expected to generate 3.19 times less return on investment than National Storage. But when comparing it to its historical volatility, Infosys Ltd ADR is 2.55 times less risky than National Storage. It trades about 0.09 of its potential returns per unit of risk. National Storage REIT is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 129.00 in National Storage REIT on April 25, 2025 and sell it today you would earn a total of 31.00 from holding National Storage REIT or generate 24.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Infosys Ltd ADR vs. National Storage REIT
Performance |
| Timeline |
| Infosys Ltd ADR |
| National Storage REIT |
Infosys and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and National Storage
The main advantage of trading using opposite Infosys and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, National Storage 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 National Storage will offset losses from the drop in National Storage's long position.| Infosys vs. Wipro Limited ADR | Infosys vs. Cognizant Technology Solutions | Infosys vs. Accenture plc | Infosys vs. Fiserv, |
| National Storage vs. NVIDIA | National Storage vs. Microsoft | National Storage vs. Apple Inc | National Storage vs. Amazon Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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