Correlation Between Infosys and Time Technoplast

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

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

Diversification Opportunities for Infosys and Time Technoplast

0.73

Correlation Coefficient

Infosys  Time Technoplast

Poor diversification

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

Pair Corralation between Infosys and Time Technoplast

Assuming the 90 days trading horizon Infosys is expected to generate 2.9 times less return on investment than Time Technoplast. But when comparing it to its historical volatility, Infosys Limited is 1.92 times less risky than Time Technoplast. It trades about 0.1 of its potential returns per unit of risk. Time Technoplast Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  37,065  in Time Technoplast Limited on April 23, 2025 and sell it today you would earn a total of  10,095  from holding Time Technoplast Limited or generate 27.24% 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.  Time Technoplast 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 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.

Time Technoplast

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Time Technoplast Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical indicators, Time Technoplast exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infosys and Time Technoplast

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

The idea behind Infosys Limited and Time Technoplast 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.