Correlation Between DiGiSPICE Technologies and Baazar Style

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

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

Diversification Opportunities for DiGiSPICE Technologies and Baazar Style

-0.36

Correlation Coefficient

DiGiSPICE Technologies  Baazar Style

Very good diversification

The 3 months correlation between DiGiSPICE and Baazar is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding DiGiSPICE Technologies Limited and Baazar Style Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baazar Style Retail and DiGiSPICE Technologies 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 DiGiSPICE Technologies Limited are associated (or correlated) with Baazar Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baazar Style Retail has no effect on the direction of DiGiSPICE Technologies i.e., DiGiSPICE Technologies and Baazar Style go up and down completely randomly.

Pair Corralation between DiGiSPICE Technologies and Baazar Style

Assuming the 90 days trading horizon DiGiSPICE Technologies is expected to generate 2.74 times less return on investment than Baazar Style. In addition to that, DiGiSPICE Technologies is 1.09 times more volatile than Baazar Style Retail. It trades about 0.06 of its total potential returns per unit of risk. Baazar Style Retail is currently generating about 0.19 per unit of volatility. If you would invest  25,995  in Baazar Style Retail on April 5, 2025 and sell it today you would earn a total of  3,720  from holding Baazar Style Retail or generate 14.31% return on investment over 90 days.

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

DiGiSPICE Technologies Limited  vs.  Baazar Style Retail

DiGiSPICE Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DiGiSPICE Technologies Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, DiGiSPICE Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Baazar Style Retail

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Baazar Style Retail are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Baazar Style is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DiGiSPICE Technologies and Baazar Style

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

The idea behind DiGiSPICE Technologies Limited and Baazar Style Retail 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.