Correlation Between V Mart and General Insurance
Can any of the company-specific risk be diversified away by investing in both V Mart and General Insurance 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 General Insurance 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 General Insurance, you can compare the effects of market volatilities on V Mart and General Insurance 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 General Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of V Mart and General Insurance.
Diversification Opportunities for V Mart and General Insurance
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VMART and General is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance 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 General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of V Mart i.e., V Mart and General Insurance go up and down completely randomly.
Pair Corralation between V Mart and General Insurance
Assuming the 90 days trading horizon V Mart Retail Limited is expected to generate 0.96 times more return on investment than General Insurance. However, V Mart Retail Limited is 1.04 times less risky than General Insurance. It trades about 0.08 of its potential returns per unit of risk. General Insurance is currently generating about 0.03 per unit of risk. 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 |
V Mart Retail Limited vs. General Insurance
Performance |
| Timeline |
| V Mart Retail |
| General Insurance |
V Mart and General Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with V Mart and General Insurance
The main advantage of trading using opposite V Mart and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V Mart position performs unexpectedly, General Insurance 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 General Insurance will offset losses from the drop in General Insurance's long position.| V Mart vs. UCO Bank | V Mart vs. DCM Financial Services | V Mart vs. CREDITACCESS GRAMEEN LIMITED | V Mart vs. UTI Asset Management |
| General Insurance vs. CREDITACCESS GRAMEEN LIMITED | General Insurance vs. KNR Constructions Limited | General Insurance vs. RBL Bank Limited | General Insurance vs. Clean Science and |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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