Correlation Between Silgo Retail and Baazar Style

Can any of the company-specific risk be diversified away by investing in both Silgo Retail and Baazar Style 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 Baazar Style 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 Baazar Style Retail, you can compare the effects of market volatilities on Silgo Retail and Baazar Style 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 Baazar Style. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silgo Retail and Baazar Style.

Diversification Opportunities for Silgo Retail and Baazar Style

0.5

Correlation Coefficient

Silgo Retail  Baazar Style

Very weak diversification

The 3 months correlation between Silgo and Baazar is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Silgo Retail Limited and Baazar Style Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baazar Style Retail 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 Baazar Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baazar Style Retail has no effect on the direction of Silgo Retail i.e., Silgo Retail and Baazar Style go up and down completely randomly.

Pair Corralation between Silgo Retail and Baazar Style

Assuming the 90 days trading horizon Silgo Retail Limited is expected to generate 1.05 times more return on investment than Baazar Style. However, Silgo Retail is 1.05 times more volatile than Baazar Style Retail. It trades about 0.13 of its potential returns per unit of risk. Baazar Style Retail is currently generating about 0.11 per unit of risk. If you would invest  3,770  in Silgo Retail Limited on September 19, 2024 and sell it today you would earn a total of  297.00  from holding Silgo Retail Limited or generate 7.88% return on investment over 90 days.

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

Silgo Retail Limited  vs.  Baazar Style Retail

Silgo Retail Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silgo Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Silgo Retail is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Baazar Style Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baazar Style Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Baazar Style is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Silgo Retail and Baazar Style

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

The idea behind Silgo Retail Limited and Baazar Style Retail 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.