Correlation Between Infosys and CLOVER HEALTH

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

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

Diversification Opportunities for Infosys and CLOVER HEALTH

-0.24

Correlation Coefficient

Infosys  CLOVER HEALTH

Very good diversification

The 3 months correlation between Infosys and CLOVER is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and CLOVER HEALTH INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLOVER HEALTH INV 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 CLOVER HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLOVER HEALTH INV has no effect on the direction of Infosys i.e., Infosys and CLOVER HEALTH go up and down completely randomly.

Pair Corralation between Infosys and CLOVER HEALTH

Assuming the 90 days horizon Infosys Limited is expected to generate 0.57 times more return on investment than CLOVER HEALTH. However, Infosys Limited is 1.76 times less risky than CLOVER HEALTH. It trades about 0.04 of its potential returns per unit of risk. CLOVER HEALTH INV is currently generating about -0.06 per unit of risk. If you would invest  1,484  in Infosys Limited on April 23, 2025 and sell it today you would earn a total of  61.00  from holding Infosys Limited or generate 4.11% return on investment over 90 days.

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

Infosys Limited  vs.  CLOVER HEALTH INV

Infosys Limited

Risk-Adjusted Performance

Modest

Over the last 90 days Infosys Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Infosys is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CLOVER HEALTH INV

Risk-Adjusted Performance

Very Weak

Over the last 90 days CLOVER HEALTH INV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Infosys and CLOVER HEALTH

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

The idea behind Infosys Limited and CLOVER HEALTH INV 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .