Correlation Between Cantabil Retail and Max Financial

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

Diversification Opportunities for Cantabil Retail and Max Financial

-0.6

Correlation Coefficient

Cantabil Retail  Max Financial

Excellent diversification

The 3 months correlation between Cantabil and Max is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cantabil Retail India and Max Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Max Financial Services 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 Max Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Max Financial Services has no effect on the direction of Cantabil Retail i.e., Cantabil Retail and Max Financial go up and down completely randomly.

Pair Corralation between Cantabil Retail and Max Financial

Assuming the 90 days trading horizon Cantabil Retail India is expected to generate 1.48 times more return on investment than Max Financial. However, Cantabil Retail is 1.48 times more volatile than Max Financial Services. It trades about 0.03 of its potential returns per unit of risk. Max Financial Services is currently generating about 0.05 per unit of risk. If you would invest  23,043  in Cantabil Retail India on September 26, 2024 and sell it today you would earn a total of  4,112  from holding Cantabil Retail India or generate 17.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.34%
Values	Daily Returns

Cantabil Retail India  vs.  Max Financial Services

Cantabil Retail India

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cantabil Retail India are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental drivers, Cantabil Retail may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Max Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Max Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Cantabil Retail and Max Financial

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

The idea behind Cantabil Retail India and Max Financial Services 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.