Correlation Between Central Retail and Sri Panwa

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

By analyzing existing cross correlation between Central Retail and Sri panwa Hospitality, you can compare the effects of market volatilities on Central Retail and Sri Panwa 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 Central Retail with a short position of Sri Panwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Retail and Sri Panwa.

Diversification Opportunities for Central Retail and Sri Panwa

0.15

Correlation Coefficient

Central Retail  Sri Panwa

Average diversification

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

Pair Corralation between Central Retail and Sri Panwa

Assuming the 90 days trading horizon Central Retail is expected to generate 0.81 times more return on investment than Sri Panwa. However, Central Retail is 1.23 times less risky than Sri Panwa. It trades about -0.01 of its potential returns per unit of risk. Sri panwa Hospitality is currently generating about -0.1 per unit of risk. If you would invest  3,425  in Central Retail on December 1, 2024 and sell it today you would lose (75.00) from holding Central Retail or give up 2.19% of portfolio value over 90 days.

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

Central Retail  vs.  Sri panwa Hospitality

Central Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Central Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Central Retail is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Sri panwa Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sri panwa Hospitality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Central Retail and Sri Panwa

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

The idea behind Central Retail and Sri panwa Hospitality 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.