Correlation Between Jindal Steel and Infosys

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

By analyzing existing cross correlation between Jindal Steel Power and Infosys Limited, you can compare the effects of market volatilities on Jindal Steel and Infosys 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 Jindal Steel with a short position of Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jindal Steel and Infosys.

Diversification Opportunities for Jindal Steel and Infosys

0.53

Correlation Coefficient

Jindal Steel  Infosys

Very weak diversification

The 3 months correlation between Jindal and Infosys is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Jindal Steel Power and Infosys Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Limited and Jindal Steel 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 Jindal Steel Power are associated (or correlated) with Infosys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infosys Limited has no effect on the direction of Jindal Steel i.e., Jindal Steel and Infosys go up and down completely randomly.

Pair Corralation between Jindal Steel and Infosys

Assuming the 90 days trading horizon Jindal Steel is expected to generate 1.68 times less return on investment than Infosys. In addition to that, Jindal Steel is 1.12 times more volatile than Infosys Limited. It trades about 0.06 of its total potential returns per unit of risk. Infosys Limited is currently generating about 0.12 per unit of volatility. If you would invest  142,891  in Infosys Limited on April 20, 2025 and sell it today you would earn a total of  15,719  from holding Infosys Limited or generate 11.0% return on investment over 90 days.

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

Jindal Steel Power  vs.  Infosys Limited

Jindal Steel Power

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jindal Steel Power are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Jindal Steel may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Infosys Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Infosys Limited are ranked lower than 9 (%) 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.

Pair Trading with Jindal Steel and Infosys

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

The idea behind Jindal Steel Power and Infosys 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.