Correlation Between Vardhman Holdings and Max Financial

Can any of the company-specific risk be diversified away by investing in both Vardhman Holdings and Max Financial 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 Vardhman Holdings and Max Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vardhman Holdings Limited and Max Financial Services, you can compare the effects of market volatilities on Vardhman Holdings and Max Financial 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 Vardhman Holdings with a short position of Max Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vardhman Holdings and Max Financial.

Diversification Opportunities for Vardhman Holdings and Max Financial

0.83

Correlation Coefficient

Vardhman Holdings  Max Financial

Very poor diversification

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

Pair Corralation between Vardhman Holdings and Max Financial

Assuming the 90 days trading horizon Vardhman Holdings is expected to generate 2.82 times less return on investment than Max Financial. In addition to that, Vardhman Holdings is 1.38 times more volatile than Max Financial Services. It trades about 0.07 of its total potential returns per unit of risk. Max Financial Services is currently generating about 0.29 per unit of volatility. If you would invest  124,770  in Max Financial Services on April 24, 2025 and sell it today you would earn a total of  31,470  from holding Max Financial Services or generate 25.22% return on investment over 90 days.

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

Vardhman Holdings Limited  vs.  Max Financial Services

Vardhman Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vardhman Holdings Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Vardhman Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Max Financial Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Max Financial Services are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Max Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vardhman Holdings and Max Financial

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

The idea behind Vardhman Holdings Limited and Max Financial Services 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.

Check out your portfolio center.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.