Correlation Between Varun Beverages and AXISCADES Technologies

Can any of the company-specific risk be diversified away by investing in both Varun Beverages and AXISCADES Technologies 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 Varun Beverages and AXISCADES Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Varun Beverages and AXISCADES Technologies

-0.83

Correlation Coefficient

Varun Beverages  AXISCADES Technologies

Pay attention - limited upside

The 3 months correlation between Varun and AXISCADES is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Varun Beverages Limited and AXISCADES Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXISCADES Technologies and Varun Beverages 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 Varun Beverages Limited are associated (or correlated) with AXISCADES Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXISCADES Technologies has no effect on the direction of Varun Beverages i.e., Varun Beverages and AXISCADES Technologies go up and down completely randomly.

Pair Corralation between Varun Beverages and AXISCADES Technologies

Assuming the 90 days trading horizon Varun Beverages Limited is expected to under-perform the AXISCADES Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Varun Beverages Limited is 1.84 times less risky than AXISCADES Technologies. The stock trades about -0.1 of its potential returns per unit of risk. The AXISCADES Technologies Limited is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  86,885  in AXISCADES Technologies Limited on April 21, 2025 and sell it today you would earn a total of  47,655  from holding AXISCADES Technologies Limited or generate 54.85% return on investment over 90 days.

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

Varun Beverages Limited  vs.  AXISCADES Technologies Limited

Varun Beverages

Risk-Adjusted Performance

Very Weak

Over the last 90 days Varun Beverages Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

AXISCADES Technologies

Risk-Adjusted Performance

Solid

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

Pair Trading with Varun Beverages and AXISCADES Technologies

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

The idea behind Varun Beverages Limited and AXISCADES Technologies 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.