Correlation Between GVP Infotech and Rajshree Sugars

Can any of the company-specific risk be diversified away by investing in both GVP Infotech and Rajshree Sugars 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 GVP Infotech and Rajshree Sugars into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GVP Infotech Limited and Rajshree Sugars Chemicals, you can compare the effects of market volatilities on GVP Infotech and Rajshree Sugars 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 GVP Infotech with a short position of Rajshree Sugars. Check out your portfolio center. Please also check ongoing floating volatility patterns of GVP Infotech and Rajshree Sugars.

Diversification Opportunities for GVP Infotech and Rajshree Sugars

0.38

Correlation Coefficient

GVP Infotech  Rajshree Sugars

Weak diversification

The 3 months correlation between GVP and Rajshree is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding GVP Infotech Limited and Rajshree Sugars Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rajshree Sugars Chemicals and GVP Infotech 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 GVP Infotech Limited are associated (or correlated) with Rajshree Sugars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rajshree Sugars Chemicals has no effect on the direction of GVP Infotech i.e., GVP Infotech and Rajshree Sugars go up and down completely randomly.

Pair Corralation between GVP Infotech and Rajshree Sugars

Assuming the 90 days trading horizon GVP Infotech Limited is expected to generate 1.29 times more return on investment than Rajshree Sugars. However, GVP Infotech is 1.29 times more volatile than Rajshree Sugars Chemicals. It trades about 0.03 of its potential returns per unit of risk. Rajshree Sugars Chemicals is currently generating about -0.01 per unit of risk. If you would invest  1,022  in GVP Infotech Limited on April 20, 2025 and sell it today you would earn a total of  23.00  from holding GVP Infotech Limited or generate 2.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GVP Infotech Limited  vs.  Rajshree Sugars Chemicals

GVP Infotech Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GVP Infotech Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, GVP Infotech is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Rajshree Sugars Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rajshree Sugars Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Rajshree Sugars is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GVP Infotech and Rajshree Sugars

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

The idea behind GVP Infotech Limited and Rajshree Sugars Chemicals 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.