Correlation Between Wipro Limited and CSP
Can any of the company-specific risk be diversified away by investing in both Wipro Limited and CSP 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 Wipro Limited and CSP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wipro Limited ADR and CSP Inc, you can compare the effects of market volatilities on Wipro Limited and CSP 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 Wipro Limited with a short position of CSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wipro Limited and CSP.
Diversification Opportunities for Wipro Limited and CSP
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wipro and CSP is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Wipro Limited ADR and CSP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSP Inc and Wipro Limited 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 Wipro Limited ADR are associated (or correlated) with CSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSP Inc has no effect on the direction of Wipro Limited i.e., Wipro Limited and CSP go up and down completely randomly.
Pair Corralation between Wipro Limited and CSP
Considering the 90-day investment horizon Wipro Limited ADR is expected to generate 0.35 times more return on investment than CSP. However, Wipro Limited ADR is 2.88 times less risky than CSP. It trades about 0.07 of its potential returns per unit of risk. CSP Inc is currently generating about -0.08 per unit of risk. If you would invest 273.00 in Wipro Limited ADR on April 16, 2025 and sell it today you would earn a total of 17.00 from holding Wipro Limited ADR or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wipro Limited ADR vs. CSP Inc
Performance |
| Timeline |
| Wipro Limited ADR |
| CSP Inc |
Wipro Limited and CSP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wipro Limited and CSP
The main advantage of trading using opposite Wipro Limited and CSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wipro Limited position performs unexpectedly, CSP 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 CSP will offset losses from the drop in CSP's long position.| Wipro Limited vs. Infosys Ltd ADR | Wipro Limited vs. Cognizant Technology Solutions | Wipro Limited vs. WNS Holdings | Wipro Limited vs. CLARIVATE PLC |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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