Correlation Between Infosys and Craft Brew

Can any of the company-specific risk be diversified away by investing in both Infosys and Craft Brew 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 Craft Brew 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 Craft Brew Alliance, you can compare the effects of market volatilities on Infosys and Craft Brew 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 Craft Brew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Craft Brew.

Diversification Opportunities for Infosys and Craft Brew

0.0

Correlation Coefficient

Infosys  Craft Brew

Pay attention - limited upside

The 3 months correlation between Infosys and Craft is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and Craft Brew Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Craft Brew Alliance 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 Craft Brew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Craft Brew Alliance has no effect on the direction of Infosys i.e., Infosys and Craft Brew go up and down completely randomly.

Pair Corralation between Infosys and Craft Brew

If you would invest (100.00) in Craft Brew Alliance on February 20, 2024 and sell it today you would earn a total of  100.00  from holding Craft Brew Alliance or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Infosys Ltd ADR  vs.  Craft Brew Alliance

Infosys Ltd ADR

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Craft Brew Alliance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Craft Brew Alliance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Craft Brew is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Infosys and Craft Brew

The main advantage of trading using opposite Infosys and Craft Brew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Craft Brew 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 Craft Brew will offset losses from the drop in Craft Brew's long position.

The idea behind Infosys Ltd ADR and Craft Brew Alliance 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.

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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.