Correlation Between V Mart and Osia Hyper

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

Diversification Opportunities for V Mart and Osia Hyper

0.31

Correlation Coefficient

V Mart  Osia Hyper

Weak diversification

The 3 months correlation between VMART and Osia is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and Osia Hyper Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osia Hyper Retail 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 Osia Hyper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osia Hyper Retail has no effect on the direction of V Mart i.e., V Mart and Osia Hyper go up and down completely randomly.

Pair Corralation between V Mart and Osia Hyper

Assuming the 90 days trading horizon V Mart Retail Limited is expected to generate 1.19 times more return on investment than Osia Hyper. However, V Mart is 1.19 times more volatile than Osia Hyper Retail. It trades about 0.06 of its potential returns per unit of risk. Osia Hyper Retail is currently generating about -0.01 per unit of risk. If you would invest  366,535  in V Mart Retail Limited on August 31, 2024 and sell it today you would earn a total of  30,360  from holding V Mart Retail Limited or generate 8.28% 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.  Osia Hyper Retail

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 unfluctuating basic indicators, V Mart may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Osia Hyper Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osia Hyper Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Osia Hyper is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with V Mart and Osia Hyper

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

The idea behind V Mart Retail Limited and Osia Hyper Retail 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.