Correlation Between Infosys and Associated Alcohols

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

By analyzing existing cross correlation between Infosys Limited and Associated Alcohols Breweries, you can compare the effects of market volatilities on Infosys and Associated Alcohols 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 Associated Alcohols. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Associated Alcohols.

Diversification Opportunities for Infosys and Associated Alcohols

-0.36

Correlation Coefficient

Infosys  Associated Alcohols

Very good diversification

The 3 months correlation between Infosys and Associated is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Associated Alcohols Breweries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Alcohols 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 Associated Alcohols. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Alcohols has no effect on the direction of Infosys i.e., Infosys and Associated Alcohols go up and down completely randomly.

Pair Corralation between Infosys and Associated Alcohols

Assuming the 90 days trading horizon Infosys Limited is expected to generate 0.57 times more return on investment than Associated Alcohols. However, Infosys Limited is 1.75 times less risky than Associated Alcohols. It trades about 0.1 of its potential returns per unit of risk. Associated Alcohols Breweries is currently generating about -0.06 per unit of risk. If you would invest  145,573  in Infosys Limited on April 23, 2025 and sell it today you would earn a total of  12,857  from holding Infosys Limited or generate 8.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Infosys Limited  vs.  Associated Alcohols Breweries

Infosys Limited

Risk-Adjusted Performance

OK

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

Associated Alcohols

Risk-Adjusted Performance

Very Weak

Over the last 90 days Associated Alcohols Breweries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Infosys and Associated Alcohols

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

The idea behind Infosys Limited and Associated Alcohols Breweries 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.