Correlation Between Zota Health and Gangotri Textiles

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

By analyzing existing cross correlation between Zota Health Care and Gangotri Textiles Limited, you can compare the effects of market volatilities on Zota Health and Gangotri Textiles 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 Zota Health with a short position of Gangotri Textiles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zota Health and Gangotri Textiles.

Diversification Opportunities for Zota Health and Gangotri Textiles

-0.51

Correlation Coefficient

Zota Health  Gangotri Textiles

Excellent diversification

The 3 months correlation between Zota and Gangotri is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zota Health Care and Gangotri Textiles Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gangotri Textiles and Zota Health 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 Zota Health Care are associated (or correlated) with Gangotri Textiles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gangotri Textiles has no effect on the direction of Zota Health i.e., Zota Health and Gangotri Textiles go up and down completely randomly.

Pair Corralation between Zota Health and Gangotri Textiles

Assuming the 90 days trading horizon Zota Health Care is expected to generate 1.85 times more return on investment than Gangotri Textiles. However, Zota Health is 1.85 times more volatile than Gangotri Textiles Limited. It trades about 0.38 of its potential returns per unit of risk. Gangotri Textiles Limited is currently generating about -0.12 per unit of risk. If you would invest  61,890  in Zota Health Care on October 6, 2024 and sell it today you would earn a total of  18,775  from holding Zota Health Care or generate 30.34% return on investment over 90 days.

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

Zota Health Care  vs.  Gangotri Textiles Limited

Zota Health Care

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zota Health Care are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Zota Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gangotri Textiles

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gangotri Textiles Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Gangotri Textiles is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Zota Health and Gangotri Textiles

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

The idea behind Zota Health Care and Gangotri Textiles 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 CEOs Directory module to screen CEOs from public companies around the world.