Correlation Between General Insurance and V Mart
Can any of the company-specific risk be diversified away by investing in both General Insurance and V Mart 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 General Insurance and V Mart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Insurance and V Mart Retail Limited, you can compare the effects of market volatilities on General Insurance and V Mart 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 General Insurance with a short position of V Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insurance and V Mart.
Diversification Opportunities for General Insurance and V Mart
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between General and VMART is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and V Mart Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V Mart Retail and General Insurance 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 General Insurance are associated (or correlated) with V Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V Mart Retail has no effect on the direction of General Insurance i.e., General Insurance and V Mart go up and down completely randomly.
Pair Corralation between General Insurance and V Mart
Assuming the 90 days trading horizon General Insurance is expected to generate 2.47 times less return on investment than V Mart. In addition to that, General Insurance is 1.04 times more volatile than V Mart Retail Limited. It trades about 0.03 of its total potential returns per unit of risk. V Mart Retail Limited is currently generating about 0.08 per unit of volatility. If you would invest 214,920 in V Mart Retail Limited on November 28, 2024 and sell it today you would earn a total of 80,235 from holding V Mart Retail Limited or generate 37.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Insurance vs. V Mart Retail Limited
Performance |
| Timeline |
| General Insurance |
| V Mart Retail |
General Insurance and V Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Insurance and V Mart
The main advantage of trading using opposite General Insurance and V Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insurance position performs unexpectedly, V Mart 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 V Mart will offset losses from the drop in V Mart's long position.| General Insurance vs. CREDITACCESS GRAMEEN LIMITED | General Insurance vs. KNR Constructions Limited | General Insurance vs. RBL Bank Limited | General Insurance vs. Clean Science and |
| V Mart vs. UCO Bank | V Mart vs. DCM Financial Services | V Mart vs. CREDITACCESS GRAMEEN LIMITED | V Mart vs. UTI Asset Management |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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