Correlation Between EMBASSY OFFICE and Dodla Dairy

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

By analyzing existing cross correlation between EMBASSY OFFICE PARKS and Dodla Dairy Limited, you can compare the effects of market volatilities on EMBASSY OFFICE and Dodla Dairy 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 EMBASSY OFFICE with a short position of Dodla Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBASSY OFFICE and Dodla Dairy.

Diversification Opportunities for EMBASSY OFFICE and Dodla Dairy

0.75

Correlation Coefficient

EMBASSY OFFICE  Dodla Dairy

Poor diversification

The 3 months correlation between EMBASSY and Dodla is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding EMBASSY OFFICE PARKS and Dodla Dairy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodla Dairy Limited and EMBASSY OFFICE 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 EMBASSY OFFICE PARKS are associated (or correlated) with Dodla Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodla Dairy Limited has no effect on the direction of EMBASSY OFFICE i.e., EMBASSY OFFICE and Dodla Dairy go up and down completely randomly.

Pair Corralation between EMBASSY OFFICE and Dodla Dairy

Assuming the 90 days trading horizon EMBASSY OFFICE is expected to generate 1.69 times less return on investment than Dodla Dairy. But when comparing it to its historical volatility, EMBASSY OFFICE PARKS is 2.02 times less risky than Dodla Dairy. It trades about 0.07 of its potential returns per unit of risk. Dodla Dairy Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  75,234  in Dodla Dairy Limited on April 25, 2025 and sell it today you would earn a total of  58,806  from holding Dodla Dairy Limited or generate 78.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

EMBASSY OFFICE PARKS  vs.  Dodla Dairy Limited

EMBASSY OFFICE PARKS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EMBASSY OFFICE PARKS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, EMBASSY OFFICE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Dodla Dairy Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dodla Dairy Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Dodla Dairy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EMBASSY OFFICE and Dodla Dairy

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

The idea behind EMBASSY OFFICE PARKS and Dodla Dairy 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.