Correlation Between V Mart and Hindware Home

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

Diversification Opportunities for V Mart and Hindware Home

0.15

Correlation Coefficient

V Mart  Hindware Home

Average diversification

The 3 months correlation between VMART and Hindware is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and Hindware Home Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hindware Home Innovation 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 Hindware Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hindware Home Innovation has no effect on the direction of V Mart i.e., V Mart and Hindware Home go up and down completely randomly.

Pair Corralation between V Mart and Hindware Home

Assuming the 90 days trading horizon V Mart Retail Limited is expected to under-perform the Hindware Home. But the stock apears to be less risky and, when comparing its historical volatility, V Mart Retail Limited is 1.21 times less risky than Hindware Home. The stock trades about -0.03 of its potential returns per unit of risk. The Hindware Home Innovation is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  19,472  in Hindware Home Innovation on April 25, 2025 and sell it today you would earn a total of  6,908  from holding Hindware Home Innovation or generate 35.48% return on investment over 90 days.

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

V Mart Retail Limited  vs.  Hindware Home Innovation

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.

Hindware Home Innovation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hindware Home Innovation are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Hindware Home reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with V Mart and Hindware Home

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

The idea behind V Mart Retail Limited and Hindware Home Innovation 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.