Correlation Between HDFC Life and Infomedia Press

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

By analyzing existing cross correlation between HDFC Life Insurance and Infomedia Press Limited, you can compare the effects of market volatilities on HDFC Life and Infomedia Press 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 HDFC Life with a short position of Infomedia Press. Check out your portfolio center. Please also check ongoing floating volatility patterns of HDFC Life and Infomedia Press.

Diversification Opportunities for HDFC Life and Infomedia Press

0.51

Correlation Coefficient

HDFC Life  Infomedia Press

Very weak diversification

The 3 months correlation between HDFC and Infomedia is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding HDFC Life Insurance and Infomedia Press Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia Press and HDFC Life 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 HDFC Life Insurance are associated (or correlated) with Infomedia Press. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infomedia Press has no effect on the direction of HDFC Life i.e., HDFC Life and Infomedia Press go up and down completely randomly.

Pair Corralation between HDFC Life and Infomedia Press

Assuming the 90 days trading horizon HDFC Life is expected to generate 2.11 times less return on investment than Infomedia Press. But when comparing it to its historical volatility, HDFC Life Insurance is 2.51 times less risky than Infomedia Press. It trades about 0.05 of its potential returns per unit of risk. Infomedia Press Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  677.00  in Infomedia Press Limited on April 22, 2025 and sell it today you would earn a total of  43.00  from holding Infomedia Press Limited or generate 6.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

HDFC Life Insurance  vs.  Infomedia Press Limited

HDFC Life Insurance

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HDFC Life Insurance are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, HDFC Life is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Infomedia Press

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Infomedia Press Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, Infomedia Press may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with HDFC Life and Infomedia Press

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

The idea behind HDFC Life Insurance and Infomedia Press Limited 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.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.