Correlation Between Robust Hotels and DiGiSPICE Technologies

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

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

Diversification Opportunities for Robust Hotels and DiGiSPICE Technologies

0.56

Correlation Coefficient

Robust Hotels  DiGiSPICE Technologies

Very weak diversification

The 3 months correlation between Robust and DiGiSPICE is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Robust Hotels Limited and DiGiSPICE Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiGiSPICE Technologies and Robust Hotels 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 Robust Hotels Limited are associated (or correlated) with DiGiSPICE Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiGiSPICE Technologies has no effect on the direction of Robust Hotels i.e., Robust Hotels and DiGiSPICE Technologies go up and down completely randomly.

Pair Corralation between Robust Hotels and DiGiSPICE Technologies

Assuming the 90 days trading horizon Robust Hotels Limited is expected to generate 0.71 times more return on investment than DiGiSPICE Technologies. However, Robust Hotels Limited is 1.41 times less risky than DiGiSPICE Technologies. It trades about 0.13 of its potential returns per unit of risk. DiGiSPICE Technologies Limited is currently generating about 0.07 per unit of risk. If you would invest  22,149  in Robust Hotels Limited on April 21, 2025 and sell it today you would earn a total of  4,381  from holding Robust Hotels Limited or generate 19.78% return on investment over 90 days.

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

Robust Hotels Limited  vs.  DiGiSPICE Technologies Limited

Robust Hotels Limited

Risk-Adjusted Performance

OK

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

DiGiSPICE Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DiGiSPICE Technologies Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, DiGiSPICE Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Robust Hotels and DiGiSPICE Technologies

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

The idea behind Robust Hotels Limited and DiGiSPICE Technologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.