Correlation Between Silgo Retail and Punjab National

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

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

Diversification Opportunities for Silgo Retail and Punjab National

-0.27

Correlation Coefficient

Silgo Retail  Punjab National

Very good diversification

The 3 months correlation between Silgo and Punjab is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Silgo Retail Limited and Punjab National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Punjab National Bank and Silgo 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 Silgo Retail Limited are associated (or correlated) with Punjab National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Punjab National Bank has no effect on the direction of Silgo Retail i.e., Silgo Retail and Punjab National go up and down completely randomly.

Pair Corralation between Silgo Retail and Punjab National

Assuming the 90 days trading horizon Silgo Retail Limited is expected to generate 2.61 times more return on investment than Punjab National. However, Silgo Retail is 2.61 times more volatile than Punjab National Bank. It trades about 0.08 of its potential returns per unit of risk. Punjab National Bank is currently generating about -0.06 per unit of risk. If you would invest  3,791  in Silgo Retail Limited on December 23, 2024 and sell it today you would earn a total of  731.00  from holding Silgo Retail Limited or generate 19.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Silgo Retail Limited  vs.  Punjab National Bank

Silgo Retail Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Silgo Retail Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent essential indicators, Silgo Retail displayed solid returns over the last few months and may actually be approaching a breakup point.

Punjab National Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Punjab National Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Silgo Retail and Punjab National

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

The idea behind Silgo Retail Limited and Punjab National Bank 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.