Correlation Between Sambhaav Media and Cantabil Retail

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

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

Diversification Opportunities for Sambhaav Media and Cantabil Retail

0.72

Correlation Coefficient

Sambhaav Media  Cantabil Retail

Poor diversification

The 3 months correlation between Sambhaav and Cantabil is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sambhaav Media 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 Sambhaav Media 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 Sambhaav Media 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 Sambhaav Media i.e., Sambhaav Media and Cantabil Retail go up and down completely randomly.

Pair Corralation between Sambhaav Media and Cantabil Retail

Assuming the 90 days trading horizon Sambhaav Media Limited is expected to generate 2.29 times more return on investment than Cantabil Retail. However, Sambhaav Media is 2.29 times more volatile than Cantabil Retail India. It trades about 0.14 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  598.00  in Sambhaav Media Limited on September 22, 2024 and sell it today you would earn a total of  281.00  from holding Sambhaav Media Limited or generate 46.99% return on investment over 90 days.

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

Sambhaav Media Limited  vs.  Cantabil Retail India

Sambhaav Media

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sambhaav Media Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Sambhaav Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Cantabil Retail India

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cantabil Retail India are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, Cantabil Retail may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sambhaav Media and Cantabil Retail

The main advantage of trading using opposite Sambhaav Media and Cantabil Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sambhaav Media 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 Sambhaav Media 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.