Correlation Between Zaggle Prepaid and Taj GVK

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

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

Diversification Opportunities for Zaggle Prepaid and Taj GVK

0.9

Correlation Coefficient

Zaggle Prepaid  Taj GVK

Almost no diversification

The 3 months correlation between Zaggle and Taj is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Zaggle Prepaid Ocean and Taj GVK Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taj GVK Hotels and Zaggle Prepaid 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 Zaggle Prepaid Ocean are associated (or correlated) with Taj GVK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taj GVK Hotels has no effect on the direction of Zaggle Prepaid i.e., Zaggle Prepaid and Taj GVK go up and down completely randomly.

Pair Corralation between Zaggle Prepaid and Taj GVK

Assuming the 90 days trading horizon Zaggle Prepaid Ocean is expected to generate 1.2 times more return on investment than Taj GVK. However, Zaggle Prepaid is 1.2 times more volatile than Taj GVK Hotels. It trades about 0.11 of its potential returns per unit of risk. Taj GVK Hotels is currently generating about 0.08 per unit of risk. If you would invest  21,415  in Zaggle Prepaid Ocean on October 5, 2024 and sell it today you would earn a total of  35,600  from holding Zaggle Prepaid Ocean or generate 166.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.34%
Values	Daily Returns

Zaggle Prepaid Ocean  vs.  Taj GVK Hotels

Zaggle Prepaid Ocean

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zaggle Prepaid Ocean are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Zaggle Prepaid sustained solid returns over the last few months and may actually be approaching a breakup point.

Taj GVK Hotels

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Taj GVK Hotels are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Taj GVK sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zaggle Prepaid and Taj GVK

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

The idea behind Zaggle Prepaid Ocean and Taj GVK Hotels 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.

Check out your portfolio center.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.