Correlation Between V Mart and City Union
Can any of the company-specific risk be diversified away by investing in both V Mart and City Union 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 V Mart and City Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between V Mart Retail Limited and City Union Bank, you can compare the effects of market volatilities on V Mart and City Union 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 V Mart with a short position of City Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of V Mart and City Union.
Diversification Opportunities for V Mart and City Union
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VMART and City is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and City Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Union Bank and V Mart 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 V Mart Retail Limited are associated (or correlated) with City Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Union Bank has no effect on the direction of V Mart i.e., V Mart and City Union go up and down completely randomly.
Pair Corralation between V Mart and City Union
Assuming the 90 days trading horizon V Mart Retail Limited is expected to under-perform the City Union. In addition to that, V Mart is 1.27 times more volatile than City Union Bank. It trades about -0.14 of its total potential returns per unit of risk. City Union Bank is currently generating about 0.07 per unit of volatility. If you would invest 15,394 in City Union Bank on October 14, 2024 and sell it today you would earn a total of 1,134 from holding City Union Bank or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
V Mart Retail Limited vs. City Union Bank
Performance |
| Timeline |
| V Mart Retail |
| City Union Bank |
V Mart and City Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with V Mart and City Union
The main advantage of trading using opposite V Mart and City Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V Mart position performs unexpectedly, City Union 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 City Union will offset losses from the drop in City Union's long position.| V Mart vs. Future Retail Limited | V Mart vs. Le Travenues Technology | V Mart vs. FCS Software Solutions | V Mart vs. Computer Age Management |
| City Union vs. WESTLIFE FOODWORLD LIMITED | City Union vs. Apex Frozen Foods | City Union vs. Jubilant Foodworks Limited | City Union vs. Ankit Metal Power |
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 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.
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