Correlation Between Infosys and Usha Martin

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Can any of the company-specific risk be diversified away by investing in both Infosys and Usha Martin 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 Usha Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infosys Limited and Usha Martin Education, you can compare the effects of market volatilities on Infosys and Usha Martin 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 Usha Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Usha Martin.

Diversification Opportunities for Infosys and Usha Martin

-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between Infosys and Usha is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Usha Martin Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usha Martin Education 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 Usha Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usha Martin Education has no effect on the direction of Infosys i.e., Infosys and Usha Martin go up and down completely randomly.

Pair Corralation between Infosys and Usha Martin

Assuming the 90 days trading horizon Infosys Limited is expected to generate 0.61 times more return on investment than Usha Martin. However, Infosys Limited is 1.65 times less risky than Usha Martin. It trades about 0.09 of its potential returns per unit of risk. Usha Martin Education is currently generating about 0.01 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  11,517  from holding Infosys Limited or generate 7.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Infosys Limited  vs.  Usha Martin Education

 Performance 
       Timeline  
Infosys Limited 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
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 unsteady basic indicators, Infosys may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Usha Martin Education 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Over the last 90 days Usha Martin Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Usha Martin is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Infosys and Usha Martin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Infosys and Usha Martin

The main advantage of trading using opposite Infosys and Usha Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, Usha Martin 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 Usha Martin will offset losses from the drop in Usha Martin's long position.
The idea behind Infosys Limited and Usha Martin Education 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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