Correlation Between Piramal Enterprises and V Mart

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

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

Diversification Opportunities for Piramal Enterprises and V Mart

-0.3

Correlation Coefficient

Piramal Enterprises  V Mart

Very good diversification

The 3 months correlation between Piramal and VMART is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Piramal Enterprises Limited 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 Piramal Enterprises 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 Piramal Enterprises Limited 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 Piramal Enterprises i.e., Piramal Enterprises and V Mart go up and down completely randomly.

Pair Corralation between Piramal Enterprises and V Mart

Assuming the 90 days trading horizon Piramal Enterprises Limited is expected to generate 1.18 times more return on investment than V Mart. However, Piramal Enterprises is 1.18 times more volatile than V Mart Retail Limited. It trades about 0.22 of its potential returns per unit of risk. V Mart Retail Limited is currently generating about -0.03 per unit of risk. If you would invest  97,184  in Piramal Enterprises Limited on April 25, 2025 and sell it today you would earn a total of  33,536  from holding Piramal Enterprises Limited or generate 34.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Piramal Enterprises Limited  vs.  V Mart Retail Limited

Piramal Enterprises

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Piramal Enterprises Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, Piramal Enterprises exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 very healthy basic indicators, V Mart is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Piramal Enterprises and V Mart

The main advantage of trading using opposite Piramal Enterprises and V Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piramal Enterprises 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 Piramal Enterprises Limited 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.