Correlation Between Cantabil Retail and Network18 Media

Can any of the company-specific risk be diversified away by investing in both Cantabil Retail and Network18 Media 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 Network18 Media 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 Network18 Media Investments, you can compare the effects of market volatilities on Cantabil Retail and Network18 Media 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 Network18 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantabil Retail and Network18 Media.

Diversification Opportunities for Cantabil Retail and Network18 Media

-0.3

Correlation Coefficient

Cantabil Retail  Network18 Media

Very good diversification

The 3 months correlation between Cantabil and Network18 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cantabil Retail India and Network18 Media Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network18 Media Inve 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 Network18 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network18 Media Inve has no effect on the direction of Cantabil Retail i.e., Cantabil Retail and Network18 Media go up and down completely randomly.

Pair Corralation between Cantabil Retail and Network18 Media

Assuming the 90 days trading horizon Cantabil Retail India is expected to generate 0.74 times more return on investment than Network18 Media. However, Cantabil Retail India is 1.34 times less risky than Network18 Media. It trades about 0.09 of its potential returns per unit of risk. Network18 Media Investments is currently generating about -0.08 per unit of risk. If you would invest  24,814  in Cantabil Retail India on September 21, 2024 and sell it today you would earn a total of  2,750  from holding Cantabil Retail India or generate 11.08% 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.  Network18 Media Investments

Cantabil Retail India

Risk-Adjusted Performance

6 of 100

Insignificant

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 unfluctuating fundamental drivers, Cantabil Retail may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Network18 Media Inve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Network18 Media Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cantabil Retail and Network18 Media

The main advantage of trading using opposite Cantabil Retail and Network18 Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantabil Retail position performs unexpectedly, Network18 Media 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 Network18 Media will offset losses from the drop in Network18 Media's long position.

The idea behind Cantabil Retail India and Network18 Media Investments 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.