Correlation Between First Bancorp and Infosys

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

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

Diversification Opportunities for First Bancorp and Infosys

0.14

Correlation Coefficient

First Bancorp  Infosys

Average diversification

The 3 months correlation between First and Infosys is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding First Bancorp and Infosys Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Ltd ADR and First Bancorp 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 First Bancorp 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 Ltd ADR has no effect on the direction of First Bancorp i.e., First Bancorp and Infosys go up and down completely randomly.

Pair Corralation between First Bancorp and Infosys

Considering the 90-day investment horizon First Bancorp is expected to generate 1.01 times more return on investment than Infosys. However, First Bancorp is 1.01 times more volatile than Infosys Ltd ADR. It trades about 0.01 of its potential returns per unit of risk. Infosys Ltd ADR is currently generating about -0.15 per unit of risk. If you would invest  2,065  in First Bancorp on May 14, 2025 and sell it today you would earn a total of  2.00  from holding First Bancorp or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

First Bancorp  vs.  Infosys Ltd ADR

First Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days First Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, First Bancorp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Infosys Ltd ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Infosys Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with First Bancorp and Infosys

The main advantage of trading using opposite First Bancorp and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancorp 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 First Bancorp and Infosys Ltd ADR 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.