Correlation Between Melstar Information and Cantabil Retail

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

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

Diversification Opportunities for Melstar Information and Cantabil Retail

0.0

Correlation Coefficient

Melstar Information  Cantabil Retail

Pay attention - limited upside

The 3 months correlation between Melstar and Cantabil is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Melstar Information Technologi 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 Melstar Information 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 Melstar Information Technologies 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 Melstar Information i.e., Melstar Information and Cantabil Retail go up and down completely randomly.

Pair Corralation between Melstar Information and Cantabil Retail

If you would invest  24,777  in Cantabil Retail India on September 25, 2024 and sell it today you would earn a total of  1,975  from holding Cantabil Retail India or generate 7.97% return on investment over 90 days.

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

Melstar Information Technologi  vs.  Cantabil Retail India

Melstar Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Melstar Information Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Melstar Information is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Cantabil Retail India

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cantabil Retail India are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental drivers, Cantabil Retail may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Melstar Information and Cantabil Retail

The main advantage of trading using opposite Melstar Information and Cantabil Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melstar Information 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 Melstar Information Technologies 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.