Correlation Between Bank of South and Infosys

Can any of the company-specific risk be diversified away by investing in both Bank of South 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 Bank of South and Infosys into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank of South and Infosys Ltd ADR, you can compare the effects of market volatilities on Bank of South 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 Bank of South with a short position of Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of South and Infosys.

Diversification Opportunities for Bank of South and Infosys

-0.44

Correlation Coefficient

Bank of South  Infosys

Very good diversification

The 3 months correlation between Bank and Infosys is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank of South 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 Bank of South 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 Bank of South 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 Bank of South i.e., Bank of South and Infosys go up and down completely randomly.

Pair Corralation between Bank of South and Infosys

Given the investment horizon of 90 days Bank of South is expected to generate 0.95 times more return on investment than Infosys. However, Bank of South is 1.06 times less risky than Infosys. It trades about 0.11 of its potential returns per unit of risk. Infosys Ltd ADR is currently generating about -0.05 per unit of risk. If you would invest  1,061  in Bank of South on July 23, 2025 and sell it today you would earn a total of  520.00  from holding Bank of South or generate 49.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.36%
Values	Daily Returns

Bank of South  vs.  Infosys Ltd ADR

Bank of South

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of South are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Bank of South may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Infosys Ltd ADR

Risk-Adjusted Performance

Weakest

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 latest inconsistent performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Bank of South and Infosys

The main advantage of trading using opposite Bank of South and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of South 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.

The idea behind Bank of South and Infosys Ltd ADR 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.