Correlation Between Mask Investments and V2 Retail

Can any of the company-specific risk be diversified away by investing in both Mask Investments and V2 Retail 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 Mask Investments and V2 Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mask Investments Limited and V2 Retail Limited, you can compare the effects of market volatilities on Mask Investments and V2 Retail 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 Mask Investments with a short position of V2 Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mask Investments and V2 Retail.

Diversification Opportunities for Mask Investments and V2 Retail

0.32

Correlation Coefficient

Mask Investments  V2 Retail

Weak diversification

The 3 months correlation between Mask and V2RETAIL is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mask Investments Limited and V2 Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V2 Retail Limited and Mask Investments 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 Mask Investments Limited are associated (or correlated) with V2 Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V2 Retail Limited has no effect on the direction of Mask Investments i.e., Mask Investments and V2 Retail go up and down completely randomly.

Pair Corralation between Mask Investments and V2 Retail

Assuming the 90 days trading horizon Mask Investments is expected to generate 2.17 times less return on investment than V2 Retail. In addition to that, Mask Investments is 1.41 times more volatile than V2 Retail Limited. It trades about 0.0 of its total potential returns per unit of risk. V2 Retail Limited is currently generating about 0.0 per unit of volatility. If you would invest  190,400  in V2 Retail Limited on April 23, 2025 and sell it today you would lose (2,350) from holding V2 Retail Limited or give up 1.23% of portfolio value over 90 days.

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

Mask Investments Limited  vs.  V2 Retail Limited

Mask Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mask Investments Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Mask Investments is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

V2 Retail Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days V2 Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, V2 Retail is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Mask Investments and V2 Retail

The main advantage of trading using opposite Mask Investments and V2 Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mask Investments position performs unexpectedly, V2 Retail 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 V2 Retail will offset losses from the drop in V2 Retail's long position.

The idea behind Mask Investments Limited and V2 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.