Correlation Between Taj GVK and DiGiSPICE Technologies

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

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

Diversification Opportunities for Taj GVK and DiGiSPICE Technologies

-0.05

Correlation Coefficient

Taj GVK  DiGiSPICE Technologies

Good diversification

The 3 months correlation between Taj and DiGiSPICE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Taj GVK Hotels and DiGiSPICE Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiGiSPICE Technologies and Taj GVK 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 Taj GVK Hotels 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 Taj GVK i.e., Taj GVK and DiGiSPICE Technologies go up and down completely randomly.

Pair Corralation between Taj GVK and DiGiSPICE Technologies

Assuming the 90 days trading horizon Taj GVK is expected to generate 14.7 times less return on investment than DiGiSPICE Technologies. But when comparing it to its historical volatility, Taj GVK Hotels is 1.31 times less risky than DiGiSPICE Technologies. It trades about 0.01 of its potential returns per unit of risk. DiGiSPICE Technologies Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,958  in DiGiSPICE Technologies Limited on April 25, 2025 and sell it today you would earn a total of  279.00  from holding DiGiSPICE Technologies Limited or generate 14.25% return on investment over 90 days.

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

Taj GVK Hotels  vs.  DiGiSPICE Technologies Limited

Taj GVK Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taj GVK Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Taj GVK is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, DiGiSPICE Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Taj GVK and DiGiSPICE Technologies

The main advantage of trading using opposite Taj GVK and DiGiSPICE Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taj GVK 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 Taj GVK Hotels 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.