Correlation Between V Mart and GACM Technologies

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Can any of the company-specific risk be diversified away by investing in both V Mart and GACM 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 V Mart and GACM Technologies 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 GACM Technologies Limited, you can compare the effects of market volatilities on V Mart and GACM 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 V Mart with a short position of GACM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of V Mart and GACM Technologies.

Diversification Opportunities for V Mart and GACM Technologies

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between VMART and GACM is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and GACM Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GACM Technologies 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 GACM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GACM Technologies has no effect on the direction of V Mart i.e., V Mart and GACM Technologies go up and down completely randomly.

Pair Corralation between V Mart and GACM Technologies

Assuming the 90 days trading horizon V Mart Retail Limited is expected to under-perform the GACM Technologies. In addition to that, V Mart is 1.19 times more volatile than GACM Technologies Limited. It trades about -0.64 of its total potential returns per unit of risk. GACM Technologies Limited is currently generating about 0.14 per unit of volatility. If you would invest  92.00  in GACM Technologies Limited on October 28, 2024 and sell it today you would earn a total of  4.00  from holding GACM Technologies Limited or generate 4.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

V Mart Retail Limited  vs.  GACM Technologies Limited

 Performance 
       Timeline  
V Mart Retail 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days V Mart Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
GACM Technologies 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in GACM Technologies Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, GACM Technologies is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

V Mart and GACM Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with V Mart and GACM Technologies

The main advantage of trading using opposite V Mart and GACM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V Mart position performs unexpectedly, GACM 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 GACM Technologies will offset losses from the drop in GACM Technologies' long position.
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The idea behind V Mart Retail Limited and GACM 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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