Correlation Between V Mart and COSMO FIRST

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

Diversification Opportunities for V Mart and COSMO FIRST

0.22

Correlation Coefficient

V Mart  COSMO FIRST

Modest diversification

The 3 months correlation between VMART and COSMO is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and COSMO FIRST LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO FIRST LIMITED 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 COSMO FIRST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO FIRST LIMITED has no effect on the direction of V Mart i.e., V Mart and COSMO FIRST go up and down completely randomly.

Pair Corralation between V Mart and COSMO FIRST

Assuming the 90 days trading horizon V Mart Retail Limited is expected to under-perform the COSMO FIRST. But the stock apears to be less risky and, when comparing its historical volatility, V Mart Retail Limited is 2.32 times less risky than COSMO FIRST. The stock trades about -0.02 of its potential returns per unit of risk. The COSMO FIRST LIMITED is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  60,115  in COSMO FIRST LIMITED on April 21, 2025 and sell it today you would earn a total of  53,585  from holding COSMO FIRST LIMITED or generate 89.14% 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.  COSMO FIRST LIMITED

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 newest stock price disarray, may contribute to short-term losses for the investors.

COSMO FIRST LIMITED

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in COSMO FIRST LIMITED are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, COSMO FIRST demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with V Mart and COSMO FIRST

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

The idea behind V Mart Retail Limited and COSMO FIRST 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.