Correlation Between Orissa Minerals and V2 Retail

Can any of the company-specific risk be diversified away by investing in both Orissa Minerals and V2 Retail 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 Orissa Minerals and V2 Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Orissa Minerals and V2 Retail Limited, you can compare the effects of market volatilities on Orissa Minerals and V2 Retail 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 Orissa Minerals with a short position of V2 Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orissa Minerals and V2 Retail.

Diversification Opportunities for Orissa Minerals and V2 Retail

-0.72

Correlation Coefficient

Orissa Minerals  V2 Retail

Pay attention - limited upside

The 3 months correlation between Orissa and V2RETAIL is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding The Orissa Minerals and V2 Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V2 Retail Limited and Orissa Minerals 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 The Orissa Minerals are associated (or correlated) with V2 Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V2 Retail Limited has no effect on the direction of Orissa Minerals i.e., Orissa Minerals and V2 Retail go up and down completely randomly.

Pair Corralation between Orissa Minerals and V2 Retail

Assuming the 90 days trading horizon Orissa Minerals is expected to generate 2.93 times less return on investment than V2 Retail. In addition to that, Orissa Minerals is 1.12 times more volatile than V2 Retail Limited. It trades about 0.07 of its total potential returns per unit of risk. V2 Retail Limited is currently generating about 0.22 per unit of volatility. If you would invest  8,560  in V2 Retail Limited on October 23, 2024 and sell it today you would earn a total of  176,520  from holding V2 Retail Limited or generate 2062.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.39%
Values	Daily Returns

The Orissa Minerals  vs.  V2 Retail Limited

Orissa Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Orissa Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward 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.

V2 Retail Limited

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in V2 Retail Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, V2 Retail demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orissa Minerals and V2 Retail

The main advantage of trading using opposite Orissa Minerals and V2 Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orissa Minerals position performs unexpectedly, V2 Retail 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 V2 Retail will offset losses from the drop in V2 Retail's long position.

The idea behind The Orissa Minerals and V2 Retail 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.