Correlation Between Sarthak Metals and V2 Retail

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

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

Diversification Opportunities for Sarthak Metals and V2 Retail

-0.32

Correlation Coefficient

Sarthak Metals  V2 Retail

Very good diversification

The 3 months correlation between Sarthak and V2RETAIL is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sarthak Metals Limited 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 Sarthak Metals 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 Sarthak Metals Limited 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 Sarthak Metals i.e., Sarthak Metals and V2 Retail go up and down completely randomly.

Pair Corralation between Sarthak Metals and V2 Retail

Assuming the 90 days trading horizon Sarthak Metals Limited is expected to under-perform the V2 Retail. In addition to that, Sarthak Metals is 1.47 times more volatile than V2 Retail Limited. It trades about -0.05 of its total potential returns per unit of risk. V2 Retail Limited is currently generating about 0.49 per unit of volatility. If you would invest  154,200  in V2 Retail Limited on October 21, 2024 and sell it today you would earn a total of  34,900  from holding V2 Retail Limited or generate 22.63% return on investment over 90 days.

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

Sarthak Metals Limited  vs.  V2 Retail Limited

Sarthak Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sarthak Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

V2 Retail Limited

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in V2 Retail Limited are ranked lower than 18 (%) 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 Sarthak Metals and V2 Retail

The main advantage of trading using opposite Sarthak Metals and V2 Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarthak Metals 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 Sarthak Metals Limited 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.