Correlation Between Infosys and A2Z Infra

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Can any of the company-specific risk be diversified away by investing in both Infosys and A2Z Infra 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 A2Z Infra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infosys Limited and A2Z Infra Engineering, you can compare the effects of market volatilities on Infosys and A2Z Infra 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 A2Z Infra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and A2Z Infra.

Diversification Opportunities for Infosys and A2Z Infra

0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between Infosys and A2Z is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and A2Z Infra Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A2Z Infra Engineering 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 Limited are associated (or correlated) with A2Z Infra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A2Z Infra Engineering has no effect on the direction of Infosys i.e., Infosys and A2Z Infra go up and down completely randomly.

Pair Corralation between Infosys and A2Z Infra

Assuming the 90 days trading horizon Infosys is expected to generate 4.87 times less return on investment than A2Z Infra. But when comparing it to its historical volatility, Infosys Limited is 2.27 times less risky than A2Z Infra. It trades about 0.09 of its potential returns per unit of risk. A2Z Infra Engineering is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,490  in A2Z Infra Engineering on April 24, 2025 and sell it today you would earn a total of  686.00  from holding A2Z Infra Engineering or generate 46.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Infosys Limited  vs.  A2Z Infra Engineering

 Performance 
       Timeline  
Infosys Limited 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Infosys Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Infosys may actually be approaching a critical reversion point that can send shares even higher in August 2025.
A2Z Infra Engineering 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in A2Z Infra Engineering are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, A2Z Infra reported solid returns over the last few months and may actually be approaching a breakup point.

Infosys and A2Z Infra Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Infosys and A2Z Infra

The main advantage of trading using opposite Infosys and A2Z Infra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, A2Z Infra 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 A2Z Infra will offset losses from the drop in A2Z Infra's long position.
The idea behind Infosys Limited and A2Z Infra Engineering 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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