Correlation Between V Mart and ITI
Can any of the company-specific risk be diversified away by investing in both V Mart and ITI 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 ITI 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 ITI Limited, you can compare the effects of market volatilities on V Mart and ITI 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 ITI. Check out your portfolio center. Please also check ongoing floating volatility patterns of V Mart and ITI.
Diversification Opportunities for V Mart and ITI
Pay attention - limited upside
The 3 months correlation between VMART and ITI is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and ITI Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITI Limited 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 ITI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITI Limited has no effect on the direction of V Mart i.e., V Mart and ITI go up and down completely randomly.
Pair Corralation between V Mart and ITI
Assuming the 90 days trading horizon V Mart Retail Limited is expected to under-perform the ITI. But the stock apears to be less risky and, when comparing its historical volatility, V Mart Retail Limited is 1.57 times less risky than ITI. The stock trades about -0.04 of its potential returns per unit of risk. The ITI Limited is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 22,119 in ITI Limited on September 5, 2024 and sell it today you would earn a total of 6,626 from holding ITI Limited or generate 29.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
V Mart Retail Limited vs. ITI Limited
Performance |
| Timeline |
| V Mart Retail |
| ITI Limited |
V Mart and ITI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with V Mart and ITI
The main advantage of trading using opposite V Mart and ITI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V Mart position performs unexpectedly, ITI 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 ITI will offset losses from the drop in ITI's long position.| V Mart vs. Reliance Industries Limited | V Mart vs. HDFC Bank Limited | V Mart vs. Tata Consultancy Services | V Mart vs. Bharti Airtel Limited |
| ITI vs. Industrial Investment Trust | ITI vs. Sanginita Chemicals Limited | ITI vs. DMCC SPECIALITY CHEMICALS | ITI vs. Ratnamani Metals Tubes |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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