Correlation Between Capacite Infraprojects and Cantabil Retail

Can any of the company-specific risk be diversified away by investing in both Capacite Infraprojects and Cantabil Retail 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 Capacite Infraprojects and Cantabil Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capacite Infraprojects Limited and Cantabil Retail India, you can compare the effects of market volatilities on Capacite Infraprojects and Cantabil Retail 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 Capacite Infraprojects with a short position of Cantabil Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capacite Infraprojects and Cantabil Retail.

Diversification Opportunities for Capacite Infraprojects and Cantabil Retail

0.65

Correlation Coefficient

Capacite Infraprojects  Cantabil Retail

Poor diversification

The 3 months correlation between Capacite and Cantabil is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Capacite Infraprojects Limited and Cantabil Retail India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantabil Retail India and Capacite Infraprojects 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 Capacite Infraprojects Limited are associated (or correlated) with Cantabil Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantabil Retail India has no effect on the direction of Capacite Infraprojects i.e., Capacite Infraprojects and Cantabil Retail go up and down completely randomly.

Pair Corralation between Capacite Infraprojects and Cantabil Retail

Assuming the 90 days trading horizon Capacite Infraprojects is expected to generate 1.22 times less return on investment than Cantabil Retail. In addition to that, Capacite Infraprojects is 1.17 times more volatile than Cantabil Retail India. It trades about 0.14 of its total potential returns per unit of risk. Cantabil Retail India is currently generating about 0.2 per unit of volatility. If you would invest  22,572  in Cantabil Retail India on October 7, 2024 and sell it today you would earn a total of  7,068  from holding Cantabil Retail India or generate 31.31% return on investment over 90 days.

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

Capacite Infraprojects Limited  vs.  Cantabil Retail India

Capacite Infraprojects

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capacite Infraprojects Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Capacite Infraprojects unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cantabil Retail India

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cantabil Retail India are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental drivers, Cantabil Retail demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capacite Infraprojects and Cantabil Retail

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

The idea behind Capacite Infraprojects Limited and Cantabil Retail 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.