Correlation Between Info Edge and Nazara Technologies

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

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

Diversification Opportunities for Info Edge and Nazara Technologies

0.77

Correlation Coefficient

Info Edge  Nazara Technologies

Poor diversification

The 3 months correlation between Info and Nazara is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Info Edge Limited and Nazara Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nazara Technologies and Info Edge 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 Info Edge Limited are associated (or correlated) with Nazara Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nazara Technologies has no effect on the direction of Info Edge i.e., Info Edge and Nazara Technologies go up and down completely randomly.

Pair Corralation between Info Edge and Nazara Technologies

Assuming the 90 days trading horizon Info Edge is expected to generate 2.91 times less return on investment than Nazara Technologies. In addition to that, Info Edge is 1.16 times more volatile than Nazara Technologies Limited. It trades about 0.09 of its total potential returns per unit of risk. Nazara Technologies Limited is currently generating about 0.31 per unit of volatility. If you would invest  94,545  in Nazara Technologies Limited on March 30, 2025 and sell it today you would earn a total of  36,505  from holding Nazara Technologies Limited or generate 38.61% return on investment over 90 days.

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

Info Edge Limited  vs.  Nazara Technologies Limited

Info Edge Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Info Edge Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal forward-looking signals, Info Edge may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Nazara Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nazara Technologies Limited are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Nazara Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Info Edge and Nazara Technologies

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

The idea behind Info Edge Limited and Nazara Technologies 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.