Correlation Between V2 Retail and Geojit Financial

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

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

Diversification Opportunities for V2 Retail and Geojit Financial

-0.6

Correlation Coefficient

V2 Retail  Geojit Financial

Excellent diversification

The 3 months correlation between V2RETAIL and Geojit is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding V2 Retail Limited and Geojit Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geojit Financial Services and V2 Retail 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 V2 Retail Limited are associated (or correlated) with Geojit Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geojit Financial Services has no effect on the direction of V2 Retail i.e., V2 Retail and Geojit Financial go up and down completely randomly.

Pair Corralation between V2 Retail and Geojit Financial

Assuming the 90 days trading horizon V2 Retail Limited is expected to generate 1.18 times more return on investment than Geojit Financial. However, V2 Retail is 1.18 times more volatile than Geojit Financial Services. It trades about 0.16 of its potential returns per unit of risk. Geojit Financial Services is currently generating about -0.26 per unit of risk. If you would invest  132,515  in V2 Retail Limited on November 29, 2024 and sell it today you would earn a total of  42,090  from holding V2 Retail Limited or generate 31.76% return on investment over 90 days.

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

V2 Retail Limited  vs.  Geojit Financial Services

V2 Retail Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in V2 Retail Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, V2 Retail demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Geojit Financial Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Geojit Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with V2 Retail and Geojit Financial

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

The idea behind V2 Retail Limited and Geojit Financial Services 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.