Correlation Between Spandana Sphoorty and Digjam

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

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

Diversification Opportunities for Spandana Sphoorty and Digjam

0.6

Correlation Coefficient

Spandana Sphoorty  Digjam

Poor diversification

The 3 months correlation between Spandana and Digjam is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Spandana Sphoorty Financial and Digjam Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digjam Limited and Spandana Sphoorty 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 Spandana Sphoorty Financial are associated (or correlated) with Digjam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digjam Limited has no effect on the direction of Spandana Sphoorty i.e., Spandana Sphoorty and Digjam go up and down completely randomly.

Pair Corralation between Spandana Sphoorty and Digjam

Assuming the 90 days trading horizon Spandana Sphoorty is expected to generate 16.67 times less return on investment than Digjam. In addition to that, Spandana Sphoorty is 1.14 times more volatile than Digjam Limited. It trades about 0.01 of its total potential returns per unit of risk. Digjam Limited is currently generating about 0.22 per unit of volatility. If you would invest  4,057  in Digjam Limited on April 23, 2025 and sell it today you would earn a total of  1,563  from holding Digjam Limited or generate 38.53% return on investment over 90 days.

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

Spandana Sphoorty Financial  vs.  Digjam Limited

Spandana Sphoorty

Risk-Adjusted Performance

Weak

Over the last 90 days Spandana Sphoorty Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Spandana Sphoorty is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Digjam Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Digjam Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating primary indicators, Digjam disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spandana Sphoorty and Digjam

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

The idea behind Spandana Sphoorty Financial and Digjam 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.