Correlation Between Orient Technologies and Cantabil Retail

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

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

Diversification Opportunities for Orient Technologies and Cantabil Retail

-0.5

Correlation Coefficient

Orient Technologies  Cantabil Retail

Very good diversification

The 3 months correlation between Orient and Cantabil is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Orient Technologies 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 Orient Technologies 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 Orient Technologies 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 Orient Technologies i.e., Orient Technologies and Cantabil Retail go up and down completely randomly.

Pair Corralation between Orient Technologies and Cantabil Retail

Assuming the 90 days trading horizon Orient Technologies Limited is expected to generate 2.02 times more return on investment than Cantabil Retail. However, Orient Technologies is 2.02 times more volatile than Cantabil Retail India. It trades about 0.11 of its potential returns per unit of risk. Cantabil Retail India is currently generating about -0.05 per unit of risk. If you would invest  31,671  in Orient Technologies Limited on August 31, 2024 and sell it today you would earn a total of  8,504  from holding Orient Technologies Limited or generate 26.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Orient Technologies Limited  vs.  Cantabil Retail India

Orient Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orient Technologies Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Orient Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cantabil Retail India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cantabil Retail India has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Orient Technologies and Cantabil Retail

The main advantage of trading using opposite Orient Technologies and Cantabil Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Technologies 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 Orient Technologies 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 Stocks Directory module to find actively traded stocks across global markets.