Correlation Between Wipro Limited and Data Storage

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

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

Diversification Opportunities for Wipro Limited and Data Storage

-0.43

Correlation Coefficient

Wipro Limited  Data Storage

Very good diversification

The 3 months correlation between Wipro and Data is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Wipro Limited ADR and Data Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Storage and Wipro Limited 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 Wipro Limited ADR are associated (or correlated) with Data Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Storage has no effect on the direction of Wipro Limited i.e., Wipro Limited and Data Storage go up and down completely randomly.

Pair Corralation between Wipro Limited and Data Storage

Considering the 90-day investment horizon Wipro Limited ADR is expected to under-perform the Data Storage. But the stock apears to be less risky and, when comparing its historical volatility, Wipro Limited ADR is 30.79 times less risky than Data Storage. The stock trades about -0.06 of its potential returns per unit of risk. The Data Storage is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Data Storage on July 13, 2025 and sell it today you would earn a total of  2.00  from holding Data Storage or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	80.0%
Values	Daily Returns

Wipro Limited ADR  vs.  Data Storage

Wipro Limited ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Wipro Limited ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Wipro Limited is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Data Storage

Risk-Adjusted Performance

Fair

Over the last 90 days Data Storage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Data Storage showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wipro Limited and Data Storage

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

The idea behind Wipro Limited ADR and Data Storage 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.