Correlation Between Infosys and Shoe Carnival

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

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

Diversification Opportunities for Infosys and Shoe Carnival

-0.02

Correlation Coefficient

Infosys  Shoe Carnival

Good diversification

The 3 months correlation between Infosys and Shoe is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Ltd ADR and Shoe Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoe Carnival 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 Ltd ADR are associated (or correlated) with Shoe Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoe Carnival has no effect on the direction of Infosys i.e., Infosys and Shoe Carnival go up and down completely randomly.

Pair Corralation between Infosys and Shoe Carnival

Given the investment horizon of 90 days Infosys Ltd ADR is expected to under-perform the Shoe Carnival. But the stock apears to be less risky and, when comparing its historical volatility, Infosys Ltd ADR is 1.96 times less risky than Shoe Carnival. The stock trades about -0.16 of its potential returns per unit of risk. The Shoe Carnival is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,944  in Shoe Carnival on May 10, 2025 and sell it today you would earn a total of  158.00  from holding Shoe Carnival or generate 8.13% return on investment over 90 days.

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

Infosys Ltd ADR  vs.  Shoe Carnival

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.

Shoe Carnival

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Shoe Carnival are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Shoe Carnival may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Infosys and Shoe Carnival

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

The idea behind Infosys Ltd ADR and Shoe Carnival 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.