Correlation Between Roshan Packages and Data Agro

Can any of the company-specific risk be diversified away by investing in both Roshan Packages and Data Agro 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 Roshan Packages and Data Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Roshan Packages and Data Agro, you can compare the effects of market volatilities on Roshan Packages and Data Agro 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 Roshan Packages with a short position of Data Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roshan Packages and Data Agro.

Diversification Opportunities for Roshan Packages and Data Agro

0.69

Correlation Coefficient

Roshan Packages  Data Agro

Poor diversification

The 3 months correlation between Roshan and Data is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Roshan Packages and Data Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Agro and Roshan Packages 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 Roshan Packages are associated (or correlated) with Data Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Agro has no effect on the direction of Roshan Packages i.e., Roshan Packages and Data Agro go up and down completely randomly.

Pair Corralation between Roshan Packages and Data Agro

Assuming the 90 days trading horizon Roshan Packages is expected to generate 0.8 times more return on investment than Data Agro. However, Roshan Packages is 1.25 times less risky than Data Agro. It trades about 0.17 of its potential returns per unit of risk. Data Agro is currently generating about 0.06 per unit of risk. If you would invest  1,509  in Roshan Packages on April 23, 2025 and sell it today you would earn a total of  600.00  from holding Roshan Packages or generate 39.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Roshan Packages  vs.  Data Agro

Roshan Packages

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Roshan Packages are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Roshan Packages reported solid returns over the last few months and may actually be approaching a breakup point.

Data Agro

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Data Agro are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Data Agro sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Roshan Packages and Data Agro

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

The idea behind Roshan Packages and Data Agro 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.