Correlation Between V Mart and Page Industries

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

Diversification Opportunities for V Mart and Page Industries

-0.51

Correlation Coefficient

V Mart  Page Industries

Excellent diversification

The 3 months correlation between VMART and Page is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and Page Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Page Industries 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 Page Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Page Industries has no effect on the direction of V Mart i.e., V Mart and Page Industries go up and down completely randomly.

Pair Corralation between V Mart and Page Industries

Assuming the 90 days trading horizon V Mart Retail Limited is expected to under-perform the Page Industries. In addition to that, V Mart is 1.48 times more volatile than Page Industries Limited. It trades about -0.13 of its total potential returns per unit of risk. Page Industries Limited is currently generating about 0.16 per unit of volatility. If you would invest  4,612,100  in Page Industries Limited on October 8, 2024 and sell it today you would earn a total of  182,020  from holding Page Industries Limited or generate 3.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

V Mart Retail Limited  vs.  Page Industries 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 unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Page Industries

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Page Industries Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Page Industries exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with V Mart and Page Industries

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

The idea behind V Mart Retail Limited and Page Industries 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.