Correlation Between Cantabil Retail and Nalwa Sons

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

Diversification Opportunities for Cantabil Retail and Nalwa Sons

-0.1

Correlation Coefficient

Cantabil Retail  Nalwa Sons

Good diversification

The 3 months correlation between Cantabil and Nalwa is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cantabil Retail India and Nalwa Sons Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nalwa Sons Investments 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 Nalwa Sons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nalwa Sons Investments has no effect on the direction of Cantabil Retail i.e., Cantabil Retail and Nalwa Sons go up and down completely randomly.

Pair Corralation between Cantabil Retail and Nalwa Sons

Assuming the 90 days trading horizon Cantabil Retail India is expected to generate 0.6 times more return on investment than Nalwa Sons. However, Cantabil Retail India is 1.66 times less risky than Nalwa Sons. It trades about 0.44 of its potential returns per unit of risk. Nalwa Sons Investments is currently generating about -0.17 per unit of risk. If you would invest  22,705  in Cantabil Retail India on September 21, 2024 and sell it today you would earn a total of  4,859  from holding Cantabil Retail India or generate 21.4% 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.  Nalwa Sons 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.

Nalwa Sons Investments

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nalwa Sons Investments are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Nalwa Sons unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cantabil Retail and Nalwa Sons

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

The idea behind Cantabil Retail India and Nalwa Sons 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.