Correlation Between KOBE STEEL and Infosys

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

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

Diversification Opportunities for KOBE STEEL and Infosys

-0.2

Correlation Coefficient

KOBE STEEL  Infosys

Good diversification

The 3 months correlation between KOBE and Infosys is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding KOBE STEEL LTD and Infosys Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Limited and KOBE 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 KOBE STEEL LTD 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 KOBE STEEL i.e., KOBE STEEL and Infosys go up and down completely randomly.

Pair Corralation between KOBE STEEL and Infosys

Assuming the 90 days trading horizon KOBE STEEL LTD is expected to generate 0.87 times more return on investment than Infosys. However, KOBE STEEL LTD is 1.15 times less risky than Infosys. It trades about 0.07 of its potential returns per unit of risk. Infosys Limited is currently generating about 0.01 per unit of risk. If you would invest  940.00  in KOBE STEEL LTD on July 25, 2025 and sell it today you would earn a total of  57.00  from holding KOBE STEEL LTD or generate 6.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

KOBE STEEL LTD  vs.  Infosys Limited

KOBE STEEL LTD

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in KOBE STEEL LTD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, KOBE STEEL may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Infosys Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Infosys Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Infosys is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KOBE STEEL and Infosys

The main advantage of trading using opposite KOBE STEEL and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOBE 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 KOBE STEEL LTD 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.