Correlation Between Vertoz Advertising and Future Retail

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

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

Diversification Opportunities for Vertoz Advertising and Future Retail

0.0

Correlation Coefficient

Vertoz Advertising  Future Retail

Pay attention - limited upside

The 3 months correlation between Vertoz and Future is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vertoz Advertising Limited and Future Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Retail Limited and Vertoz Advertising 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 Vertoz Advertising Limited are associated (or correlated) with Future Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Retail Limited has no effect on the direction of Vertoz Advertising i.e., Vertoz Advertising and Future Retail go up and down completely randomly.

Pair Corralation between Vertoz Advertising and Future Retail

Assuming the 90 days trading horizon Vertoz Advertising Limited is expected to generate 37.88 times more return on investment than Future Retail. However, Vertoz Advertising is 37.88 times more volatile than Future Retail Limited. It trades about 0.09 of its potential returns per unit of risk. Future Retail Limited is currently generating about -0.02 per unit of risk. If you would invest  1,220  in Vertoz Advertising Limited on September 21, 2024 and sell it today you would earn a total of  278.00  from holding Vertoz Advertising Limited or generate 22.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	89.37%
Values	Daily Returns

Vertoz Advertising Limited  vs.  Future Retail Limited

Vertoz Advertising

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Vertoz Advertising Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Future Retail Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Future Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Future Retail is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Vertoz Advertising and Future Retail

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

The idea behind Vertoz Advertising Limited and Future 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.