Correlation Between POWERGRID Infrastructure and V Mart

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

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

Diversification Opportunities for POWERGRID Infrastructure and V Mart

-0.26

Correlation Coefficient

POWERGRID Infrastructure  V Mart

Very good diversification

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

Pair Corralation between POWERGRID Infrastructure and V Mart

Assuming the 90 days trading horizon POWERGRID Infrastructure Investment is expected to generate 0.24 times more return on investment than V Mart. However, POWERGRID Infrastructure Investment is 4.13 times less risky than V Mart. It trades about -0.06 of its potential returns per unit of risk. V Mart Retail Limited is currently generating about -0.07 per unit of risk. If you would invest  8,796  in POWERGRID Infrastructure Investment on September 4, 2024 and sell it today you would lose (158.00) from holding POWERGRID Infrastructure Investment or give up 1.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

POWERGRID Infrastructure Inves  vs.  V Mart Retail Limited

POWERGRID Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days POWERGRID Infrastructure Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, POWERGRID Infrastructure is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

V Mart Retail

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in V Mart Retail Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, V Mart may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with POWERGRID Infrastructure and V Mart

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

The idea behind POWERGRID Infrastructure Investment and V Mart 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 Stocks Directory module to find actively traded stocks across global markets.