Correlation Between Future Retail and Cartrade Tech

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Can any of the company-specific risk be diversified away by investing in both Future Retail and Cartrade Tech 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 Future Retail and Cartrade Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Future Retail Limited and Cartrade Tech Limited, you can compare the effects of market volatilities on Future Retail and Cartrade Tech 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 Future Retail with a short position of Cartrade Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Future Retail and Cartrade Tech.

Diversification Opportunities for Future Retail and Cartrade Tech

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Future and Cartrade is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Future Retail Limited and Cartrade Tech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartrade Tech Limited and Future 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 Future Retail Limited are associated (or correlated) with Cartrade Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartrade Tech Limited has no effect on the direction of Future Retail i.e., Future Retail and Cartrade Tech go up and down completely randomly.

Pair Corralation between Future Retail and Cartrade Tech

If you would invest  136,775  in Cartrade Tech Limited on November 28, 2024 and sell it today you would earn a total of  13,095  from holding Cartrade Tech Limited or generate 9.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Future Retail Limited  vs.  Cartrade Tech Limited

 Performance 
       Timeline  
Future Retail Limited 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Future Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Future Retail is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.
Cartrade Tech Limited 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Cartrade Tech Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cartrade Tech exhibited solid returns over the last few months and may actually be approaching a breakup point.

Future Retail and Cartrade Tech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Future Retail and Cartrade Tech

The main advantage of trading using opposite Future Retail and Cartrade Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Future Retail position performs unexpectedly, Cartrade Tech 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 Cartrade Tech will offset losses from the drop in Cartrade Tech's long position.
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The idea behind Future Retail Limited and Cartrade Tech Limited 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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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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