Correlation Between V Mart and Mold Tek

Can any of the company-specific risk be diversified away by investing in both V Mart and Mold Tek 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 Mold Tek 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 Mold Tek Packaging Limited, you can compare the effects of market volatilities on V Mart and Mold Tek 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 Mold Tek. Check out your portfolio center. Please also check ongoing floating volatility patterns of V Mart and Mold Tek.

Diversification Opportunities for V Mart and Mold Tek

0.94

Correlation Coefficient

V Mart  Mold Tek

Almost no diversification

The 3 months correlation between VMART and Mold is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and Mold Tek Packaging Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mold Tek Packaging 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 Mold Tek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mold Tek Packaging has no effect on the direction of V Mart i.e., V Mart and Mold Tek go up and down completely randomly.

Pair Corralation between V Mart and Mold Tek

Assuming the 90 days trading horizon V Mart Retail Limited is expected to generate 1.04 times more return on investment than Mold Tek. However, V Mart is 1.04 times more volatile than Mold Tek Packaging Limited. It trades about -0.19 of its potential returns per unit of risk. Mold Tek Packaging Limited is currently generating about -0.29 per unit of risk. If you would invest  405,435  in V Mart Retail Limited on December 4, 2024 and sell it today you would lose (107,865) from holding V Mart Retail Limited or give up 26.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

V Mart Retail Limited  vs.  Mold Tek Packaging Limited

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 unfluctuating 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.

Mold Tek Packaging

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mold Tek Packaging Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with V Mart and Mold Tek

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

The idea behind V Mart Retail Limited and Mold Tek Packaging 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.