Correlation Between Globus Spirits and Sula Vineyards

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

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

Diversification Opportunities for Globus Spirits and Sula Vineyards

-0.1

Correlation Coefficient

Globus Spirits  Sula Vineyards

Good diversification

The 3 months correlation between Globus and Sula is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Globus Spirits Limited and Sula Vineyards Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sula Vineyards and Globus Spirits 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 Globus Spirits Limited are associated (or correlated) with Sula Vineyards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sula Vineyards has no effect on the direction of Globus Spirits i.e., Globus Spirits and Sula Vineyards go up and down completely randomly.

Pair Corralation between Globus Spirits and Sula Vineyards

Assuming the 90 days trading horizon Globus Spirits Limited is expected to generate 1.2 times more return on investment than Sula Vineyards. However, Globus Spirits is 1.2 times more volatile than Sula Vineyards Limited. It trades about 0.06 of its potential returns per unit of risk. Sula Vineyards Limited is currently generating about 0.07 per unit of risk. If you would invest  106,330  in Globus Spirits Limited on April 25, 2025 and sell it today you would earn a total of  7,080  from holding Globus Spirits Limited or generate 6.66% return on investment over 90 days.

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

Globus Spirits Limited  vs.  Sula Vineyards Limited

Globus Spirits

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Globus Spirits Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Globus Spirits may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Sula Vineyards

Risk-Adjusted Performance

Modest

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

Pair Trading with Globus Spirits and Sula Vineyards

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

The idea behind Globus Spirits Limited and Sula Vineyards 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .