Correlation Between V Mart and MAS Financial

Can any of the company-specific risk be diversified away by investing in both V Mart and MAS 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 V Mart and MAS Financial 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 MAS Financial Services, you can compare the effects of market volatilities on V Mart and MAS 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 V Mart with a short position of MAS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of V Mart and MAS Financial.

Diversification Opportunities for V Mart and MAS Financial

0.93

Correlation Coefficient

V Mart  MAS Financial

Almost no diversification

The 3 months correlation between VMART and MAS is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and MAS Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAS Financial Services 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 MAS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAS Financial Services has no effect on the direction of V Mart i.e., V Mart and MAS Financial go up and down completely randomly.

Pair Corralation between V Mart and MAS Financial

Assuming the 90 days trading horizon V Mart Retail Limited is expected to under-perform the MAS Financial. In addition to that, V Mart is 1.38 times more volatile than MAS Financial Services. It trades about -0.17 of its total potential returns per unit of risk. MAS Financial Services is currently generating about -0.13 per unit of volatility. If you would invest  27,431  in MAS Financial Services on December 2, 2024 and sell it today you would lose (4,076) from holding MAS Financial Services or give up 14.86% of portfolio value over 90 days.

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

V Mart Retail Limited  vs.  MAS Financial Services

V Mart Retail

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

MAS Financial Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days MAS 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 somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with V Mart and MAS Financial

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

The idea behind V Mart Retail Limited and MAS 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.