Correlation Between Gangotri Textiles and Gujarat Narmada

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

By analyzing existing cross correlation between Gangotri Textiles Limited and Gujarat Narmada Valley, you can compare the effects of market volatilities on Gangotri Textiles and Gujarat Narmada 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 Gangotri Textiles with a short position of Gujarat Narmada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gangotri Textiles and Gujarat Narmada.

Diversification Opportunities for Gangotri Textiles and Gujarat Narmada

-0.31

Correlation Coefficient

Gangotri Textiles  Gujarat Narmada

Very good diversification

The 3 months correlation between Gangotri and Gujarat is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gangotri Textiles Limited and Gujarat Narmada Valley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gujarat Narmada Valley and Gangotri Textiles 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 Gangotri Textiles Limited are associated (or correlated) with Gujarat Narmada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gujarat Narmada Valley has no effect on the direction of Gangotri Textiles i.e., Gangotri Textiles and Gujarat Narmada go up and down completely randomly.

Pair Corralation between Gangotri Textiles and Gujarat Narmada

Assuming the 90 days trading horizon Gangotri Textiles Limited is expected to under-perform the Gujarat Narmada. But the stock apears to be less risky and, when comparing its historical volatility, Gangotri Textiles Limited is 1.19 times less risky than Gujarat Narmada. The stock trades about -0.16 of its potential returns per unit of risk. The Gujarat Narmada Valley is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  48,760  in Gujarat Narmada Valley on April 25, 2025 and sell it today you would earn a total of  6,530  from holding Gujarat Narmada Valley or generate 13.39% return on investment over 90 days.

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

Gangotri Textiles Limited  vs.  Gujarat Narmada Valley

Gangotri Textiles

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gangotri Textiles Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Gujarat Narmada Valley

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gujarat Narmada Valley are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gujarat Narmada unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gangotri Textiles and Gujarat Narmada

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

The idea behind Gangotri Textiles Limited and Gujarat Narmada Valley 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.