Correlation Between Cantabil Retail and MAS Financial

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

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

Diversification Opportunities for Cantabil Retail and MAS Financial

-0.43

Correlation Coefficient

Cantabil Retail  MAS Financial

Very good diversification

The 3 months correlation between Cantabil and MAS is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cantabil Retail India and MAS Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAS Financial Services and Cantabil 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 Cantabil Retail India are associated (or correlated) with MAS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAS Financial Services has no effect on the direction of Cantabil Retail i.e., Cantabil Retail and MAS Financial go up and down completely randomly.

Pair Corralation between Cantabil Retail and MAS Financial

Assuming the 90 days trading horizon Cantabil Retail India is expected to generate 1.52 times more return on investment than MAS Financial. However, Cantabil Retail is 1.52 times more volatile than MAS Financial Services. It trades about 0.02 of its potential returns per unit of risk. MAS Financial Services is currently generating about -0.04 per unit of risk. If you would invest  26,640  in Cantabil Retail India on September 27, 2024 and sell it today you would earn a total of  515.00  from holding Cantabil Retail India or generate 1.93% return on investment over 90 days.

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

Cantabil Retail India  vs.  MAS Financial Services

Cantabil Retail India

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cantabil Retail India are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental drivers, Cantabil Retail may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MAS Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cantabil Retail and MAS Financial

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

The idea behind Cantabil Retail India and MAS Financial Services 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.