Correlation Between Cantabil Retail and Jindal Stainless

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

Diversification Opportunities for Cantabil Retail and Jindal Stainless

0.15

Correlation Coefficient

Cantabil Retail  Jindal Stainless

Average diversification

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

Pair Corralation between Cantabil Retail and Jindal Stainless

Assuming the 90 days trading horizon Cantabil Retail India is expected to generate 1.45 times more return on investment than Jindal Stainless. However, Cantabil Retail is 1.45 times more volatile than Jindal Stainless Limited. It trades about 0.02 of its potential returns per unit of risk. Jindal Stainless Limited is currently generating about -0.13 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cantabil Retail India  vs.  Jindal Stainless Limited

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.

Jindal Stainless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jindal Stainless Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Cantabil Retail and Jindal Stainless

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

The idea behind Cantabil Retail India and Jindal Stainless 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.