Correlation Between V Mart and Divis Laboratories

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

Diversification Opportunities for V Mart and Divis Laboratories

0.67

Correlation Coefficient

V Mart  Divis Laboratories

Poor diversification

The 3 months correlation between VMART and Divis is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding V Mart Retail Limited and Divis Laboratories Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Divis Laboratories 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 Divis Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Divis Laboratories has no effect on the direction of V Mart i.e., V Mart and Divis Laboratories go up and down completely randomly.

Pair Corralation between V Mart and Divis Laboratories

Assuming the 90 days trading horizon V Mart is expected to generate 1.15 times less return on investment than Divis Laboratories. In addition to that, V Mart is 1.65 times more volatile than Divis Laboratories Limited. It trades about 0.04 of its total potential returns per unit of risk. Divis Laboratories Limited is currently generating about 0.08 per unit of volatility. If you would invest  613,250  in Divis Laboratories Limited on August 14, 2025 and sell it today you would earn a total of  40,700  from holding Divis Laboratories Limited or generate 6.64% return on investment over 90 days.

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

V Mart Retail Limited  vs.  Divis Laboratories Limited

V Mart Retail

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in V Mart Retail Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, V Mart is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Divis Laboratories

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Divis Laboratories Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady essential indicators, Divis Laboratories may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with V Mart and Divis Laboratories

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

The idea behind V Mart Retail Limited and Divis Laboratories 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.