Correlation Between Cantabil Retail and Hemisphere Properties

Can any of the company-specific risk be diversified away by investing in both Cantabil Retail and Hemisphere Properties 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 Hemisphere Properties 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 Hemisphere Properties India, you can compare the effects of market volatilities on Cantabil Retail and Hemisphere Properties 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 Hemisphere Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantabil Retail and Hemisphere Properties.

Diversification Opportunities for Cantabil Retail and Hemisphere Properties

-0.17

Correlation Coefficient

Cantabil Retail  Hemisphere Properties

Good diversification

The 3 months correlation between Cantabil and Hemisphere is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cantabil Retail India and Hemisphere Properties India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Properties 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 Hemisphere Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Properties has no effect on the direction of Cantabil Retail i.e., Cantabil Retail and Hemisphere Properties go up and down completely randomly.

Pair Corralation between Cantabil Retail and Hemisphere Properties

Assuming the 90 days trading horizon Cantabil Retail India is expected to generate 1.25 times more return on investment than Hemisphere Properties. However, Cantabil Retail is 1.25 times more volatile than Hemisphere Properties India. It trades about 0.04 of its potential returns per unit of risk. Hemisphere Properties India is currently generating about -0.17 per unit of risk. If you would invest  22,851  in Cantabil Retail India on December 2, 2024 and sell it today you would earn a total of  1,384  from holding Cantabil Retail India or generate 6.06% return on investment over 90 days.

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

Cantabil Retail India  vs.  Hemisphere Properties India

Cantabil Retail India

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cantabil Retail India are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal fundamental drivers, Cantabil Retail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Hemisphere Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hemisphere Properties India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cantabil Retail and Hemisphere Properties

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

The idea behind Cantabil Retail India and Hemisphere Properties India 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.