Correlation Between Infosys and Imagicaaworld Entertainment

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

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

Diversification Opportunities for Infosys and Imagicaaworld Entertainment

0.3

Correlation Coefficient

Infosys  Imagicaaworld Entertainment

Weak diversification

The 3 months correlation between Infosys and Imagicaaworld is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Imagicaaworld Entertainment Li in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imagicaaworld Entertainment 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 Imagicaaworld Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imagicaaworld Entertainment has no effect on the direction of Infosys i.e., Infosys and Imagicaaworld Entertainment go up and down completely randomly.

Pair Corralation between Infosys and Imagicaaworld Entertainment

Assuming the 90 days trading horizon Infosys Limited is expected to generate 0.64 times more return on investment than Imagicaaworld Entertainment. However, Infosys Limited is 1.57 times less risky than Imagicaaworld Entertainment. It trades about 0.12 of its potential returns per unit of risk. Imagicaaworld Entertainment Limited is currently generating about -0.01 per unit of risk. If you would invest  142,891  in Infosys Limited on April 20, 2025 and sell it today you would earn a total of  15,719  from holding Infosys Limited or generate 11.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Infosys Limited  vs.  Imagicaaworld Entertainment Li

Infosys Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Infosys Limited are ranked lower than 9 (%) 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.

Imagicaaworld Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Imagicaaworld Entertainment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Imagicaaworld Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Infosys and Imagicaaworld Entertainment

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

The idea behind Infosys Limited and Imagicaaworld Entertainment 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.