Correlation Between Punjab Sind and V2 Retail

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

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

Diversification Opportunities for Punjab Sind and V2 Retail

0.48

Correlation Coefficient

Punjab Sind  V2 Retail

Very weak diversification

The 3 months correlation between Punjab and V2RETAIL is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Punjab Sind Bank 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 Punjab Sind 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 Punjab Sind Bank 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 Punjab Sind i.e., Punjab Sind and V2 Retail go up and down completely randomly.

Pair Corralation between Punjab Sind and V2 Retail

Assuming the 90 days trading horizon Punjab Sind is expected to generate 23.82 times less return on investment than V2 Retail. But when comparing it to its historical volatility, Punjab Sind Bank is 1.02 times less risky than V2 Retail. It trades about 0.0 of its potential returns per unit of risk. V2 Retail Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  162,555  in V2 Retail Limited on December 26, 2024 and sell it today you would earn a total of  11,910  from holding V2 Retail Limited or generate 7.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Punjab Sind Bank  vs.  V2 Retail Limited

Punjab Sind Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Punjab Sind Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Punjab Sind is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

V2 Retail Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in V2 Retail Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, V2 Retail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Punjab Sind and V2 Retail

The main advantage of trading using opposite Punjab Sind and V2 Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Punjab Sind 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 Punjab Sind Bank 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.