Correlation Between Valiant Organics and Gujarat Lease

Can any of the company-specific risk be diversified away by investing in both Valiant Organics and Gujarat Lease 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 Valiant Organics and Gujarat Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Valiant Organics Limited and Gujarat Lease Financing, you can compare the effects of market volatilities on Valiant Organics and Gujarat Lease 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 Valiant Organics with a short position of Gujarat Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valiant Organics and Gujarat Lease.

Diversification Opportunities for Valiant Organics and Gujarat Lease

-0.16

Correlation Coefficient

Valiant Organics  Gujarat Lease

Good diversification

The 3 months correlation between Valiant and Gujarat is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Valiant Organics Limited and Gujarat Lease Financing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gujarat Lease Financing and Valiant Organics 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 Valiant Organics Limited are associated (or correlated) with Gujarat Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gujarat Lease Financing has no effect on the direction of Valiant Organics i.e., Valiant Organics and Gujarat Lease go up and down completely randomly.

Pair Corralation between Valiant Organics and Gujarat Lease

Assuming the 90 days trading horizon Valiant Organics Limited is expected to generate 1.23 times more return on investment than Gujarat Lease. However, Valiant Organics is 1.23 times more volatile than Gujarat Lease Financing. It trades about 0.09 of its potential returns per unit of risk. Gujarat Lease Financing is currently generating about 0.07 per unit of risk. If you would invest  30,830  in Valiant Organics Limited on May 7, 2025 and sell it today you would earn a total of  5,630  from holding Valiant Organics Limited or generate 18.26% return on investment over 90 days.

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

Valiant Organics Limited  vs.  Gujarat Lease Financing

Valiant Organics

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Valiant Organics Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Valiant Organics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gujarat Lease Financing

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Gujarat Lease Financing are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Gujarat Lease may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Valiant Organics and Gujarat Lease

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

The idea behind Valiant Organics Limited and Gujarat Lease Financing 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.