Correlation Between Infosys and MOIL

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

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

Diversification Opportunities for Infosys and MOIL

0.78

Correlation Coefficient

Infosys  MOIL

Poor diversification

The 3 months correlation between Infosys and MOIL is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and MOIL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOIL Limited 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 MOIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOIL Limited has no effect on the direction of Infosys i.e., Infosys and MOIL go up and down completely randomly.

Pair Corralation between Infosys and MOIL

Assuming the 90 days trading horizon Infosys is expected to generate 2.78 times less return on investment than MOIL. But when comparing it to its historical volatility, Infosys Limited is 1.37 times less risky than MOIL. It trades about 0.09 of its potential returns per unit of risk. MOIL Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  31,720  in MOIL Limited on April 25, 2025 and sell it today you would earn a total of  7,635  from holding MOIL Limited or generate 24.07% return on investment over 90 days.

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

Infosys Limited  vs.  MOIL Limited

Infosys Limited

Risk-Adjusted Performance

OK

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 uncertain basic indicators, Infosys may actually be approaching a critical reversion point that can send shares even higher in August 2025.

MOIL Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MOIL Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MOIL unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infosys and MOIL

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

The idea behind Infosys Limited and MOIL 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.