Correlation Between Infosys and Niva Bupa

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

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

Diversification Opportunities for Infosys and Niva Bupa

0.07

Correlation Coefficient

Infosys  Niva Bupa

Significant diversification

The 3 months correlation between Infosys and Niva is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Niva Bupa Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niva Bupa Health 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 Niva Bupa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niva Bupa Health has no effect on the direction of Infosys i.e., Infosys and Niva Bupa go up and down completely randomly.

Pair Corralation between Infosys and Niva Bupa

Assuming the 90 days trading horizon Infosys Limited is expected to generate 0.53 times more return on investment than Niva Bupa. However, Infosys Limited is 1.9 times less risky than Niva Bupa. It trades about 0.09 of its potential returns per unit of risk. Niva Bupa Health is currently generating about 0.02 per unit of risk. If you would invest  145,257  in Infosys Limited on April 24, 2025 and sell it today you would earn a total of  11,833  from holding Infosys Limited or generate 8.15% return on investment over 90 days.

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

Infosys Limited  vs.  Niva Bupa Health

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

Niva Bupa Health

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Niva Bupa Health are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Niva Bupa is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Infosys and Niva Bupa

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

The idea behind Infosys Limited and Niva Bupa Health 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.