Correlation Between Rossari Biotech and Robust Hotels

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

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

Diversification Opportunities for Rossari Biotech and Robust Hotels

0.73

Correlation Coefficient

Rossari Biotech  Robust Hotels

Poor diversification

The 3 months correlation between Rossari and Robust is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Rossari Biotech Limited and Robust Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robust Hotels Limited and Rossari Biotech 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 Rossari Biotech Limited are associated (or correlated) with Robust Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robust Hotels Limited has no effect on the direction of Rossari Biotech i.e., Rossari Biotech and Robust Hotels go up and down completely randomly.

Pair Corralation between Rossari Biotech and Robust Hotels

Assuming the 90 days trading horizon Rossari Biotech is expected to generate 1.34 times less return on investment than Robust Hotels. But when comparing it to its historical volatility, Rossari Biotech Limited is 1.29 times less risky than Robust Hotels. It trades about 0.12 of its potential returns per unit of risk. Robust Hotels Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  22,149  in Robust Hotels Limited on April 20, 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	Significant
Accuracy	100.0%
Values	Daily Returns

Rossari Biotech Limited  vs.  Robust Hotels Limited

Rossari Biotech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rossari Biotech Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Rossari Biotech demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 uncertain technical and fundamental indicators, Robust Hotels exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rossari Biotech and Robust Hotels

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

The idea behind Rossari Biotech Limited and Robust Hotels 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.