Correlation Between Infosys and FUJITSU
Can any of the company-specific risk be diversified away by investing in both Infosys and FUJITSU 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 FUJITSU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infosys Limited and FUJITSU LTD ADR, you can compare the effects of market volatilities on Infosys and FUJITSU 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 FUJITSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and FUJITSU.
Diversification Opportunities for Infosys and FUJITSU
Poor diversification
The 3 months correlation between Infosys and FUJITSU is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and FUJITSU LTD ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUJITSU LTD ADR 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 FUJITSU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUJITSU LTD ADR has no effect on the direction of Infosys i.e., Infosys and FUJITSU go up and down completely randomly.
Pair Corralation between Infosys and FUJITSU
Assuming the 90 days horizon Infosys Limited is expected to generate 1.32 times more return on investment than FUJITSU. However, Infosys is 1.32 times more volatile than FUJITSU LTD ADR. It trades about 0.07 of its potential returns per unit of risk. FUJITSU LTD ADR is currently generating about 0.05 per unit of risk. If you would invest 1,430 in Infosys Limited on April 21, 2025 and sell it today you would earn a total of 120.00 from holding Infosys Limited or generate 8.39% 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. FUJITSU LTD ADR
Performance |
Timeline |
Infosys Limited |
FUJITSU LTD ADR |
Infosys and FUJITSU Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Infosys and FUJITSU
The main advantage of trading using opposite Infosys and FUJITSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys position performs unexpectedly, FUJITSU 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 FUJITSU will offset losses from the drop in FUJITSU's long position.Infosys vs. PNC Financial Services | Infosys vs. COREBRIDGE FINANCIAL INC | Infosys vs. CDN IMPERIAL BANK | Infosys vs. The Boston Beer |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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