Correlation Between V Mart and Aptech

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

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

Diversification Opportunities for V Mart and Aptech

0.26

Correlation Coefficient

V Mart  Aptech

Modest diversification

The 3 months correlation between VMART and Aptech is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and Aptech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptech Limited and V Mart 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 V Mart Retail Limited are associated (or correlated) with Aptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptech Limited has no effect on the direction of V Mart i.e., V Mart and Aptech go up and down completely randomly.

Pair Corralation between V Mart and Aptech

Assuming the 90 days trading horizon V Mart Retail Limited is expected to generate 0.47 times more return on investment than Aptech. However, V Mart Retail Limited is 2.14 times less risky than Aptech. It trades about 0.04 of its potential returns per unit of risk. Aptech Limited is currently generating about 0.01 per unit of risk. If you would invest  283,005  in V Mart Retail Limited on September 21, 2024 and sell it today you would earn a total of  101,405  from holding V Mart Retail Limited or generate 35.83% return on investment over 90 days.

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

V Mart Retail Limited  vs.  Aptech Limited

V Mart Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days V Mart Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, V Mart is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Aptech Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with V Mart and Aptech

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

The idea behind V Mart Retail Limited and Aptech 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.