Correlation Between Silly Monks and Cantabil Retail

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

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

Diversification Opportunities for Silly Monks and Cantabil Retail

0.58

Correlation Coefficient

Silly Monks  Cantabil Retail

Very weak diversification

The 3 months correlation between Silly and Cantabil is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Silly Monks Entertainment 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 Silly Monks 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 Silly Monks Entertainment 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 Silly Monks i.e., Silly Monks and Cantabil Retail go up and down completely randomly.

Pair Corralation between Silly Monks and Cantabil Retail

Assuming the 90 days trading horizon Silly Monks is expected to generate 1.1 times less return on investment than Cantabil Retail. In addition to that, Silly Monks is 1.36 times more volatile than Cantabil Retail India. It trades about 0.25 of its total potential returns per unit of risk. Cantabil Retail India is currently generating about 0.37 per unit of volatility. If you would invest  24,155  in Cantabil Retail India on October 6, 2024 and sell it today you would earn a total of  5,485  from holding Cantabil Retail India or generate 22.71% return on investment over 90 days.

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

Silly Monks Entertainment  vs.  Cantabil Retail India

Silly Monks Entertainment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silly Monks Entertainment are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Silly Monks displayed solid returns over the last few months and may actually be approaching a breakup point.

Cantabil Retail India

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cantabil Retail India are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental drivers, Cantabil Retail demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silly Monks and Cantabil Retail

The main advantage of trading using opposite Silly Monks and Cantabil Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silly Monks 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 Silly Monks Entertainment 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.