Correlation Between Cantabil Retail and Allied Blenders

Can any of the company-specific risk be diversified away by investing in both Cantabil Retail and Allied Blenders 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 Cantabil Retail and Allied Blenders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cantabil Retail India and Allied Blenders Distillers, you can compare the effects of market volatilities on Cantabil Retail and Allied Blenders 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 Cantabil Retail with a short position of Allied Blenders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantabil Retail and Allied Blenders.

Diversification Opportunities for Cantabil Retail and Allied Blenders

0.61

Correlation Coefficient

Cantabil Retail  Allied Blenders

Poor diversification

The 3 months correlation between Cantabil and Allied is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cantabil Retail India and Allied Blenders Distillers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Blenders Dist and Cantabil Retail 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 Cantabil Retail India are associated (or correlated) with Allied Blenders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Blenders Dist has no effect on the direction of Cantabil Retail i.e., Cantabil Retail and Allied Blenders go up and down completely randomly.

Pair Corralation between Cantabil Retail and Allied Blenders

Assuming the 90 days trading horizon Cantabil Retail India is expected to generate 1.43 times more return on investment than Allied Blenders. However, Cantabil Retail is 1.43 times more volatile than Allied Blenders Distillers. It trades about 0.02 of its potential returns per unit of risk. Allied Blenders Distillers is currently generating about -0.17 per unit of risk. If you would invest  26,489  in Cantabil Retail India on December 26, 2024 and sell it today you would earn a total of  148.00  from holding Cantabil Retail India or generate 0.56% return on investment over 90 days.

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

Cantabil Retail India  vs.  Allied Blenders Distillers

Cantabil Retail India

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cantabil Retail India are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Cantabil Retail is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Allied Blenders Dist

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allied Blenders Distillers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cantabil Retail and Allied Blenders

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

The idea behind Cantabil Retail India and Allied Blenders Distillers 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.