Correlation Between Can Fin and Vardhman Special

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

By analyzing existing cross correlation between Can Fin Homes and Vardhman Special Steels, you can compare the effects of market volatilities on Can Fin and Vardhman Special 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 Can Fin with a short position of Vardhman Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Can Fin and Vardhman Special.

Diversification Opportunities for Can Fin and Vardhman Special

0.47

Correlation Coefficient

Can Fin  Vardhman Special

Very weak diversification

The 3 months correlation between Can and Vardhman is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Can Fin Homes and Vardhman Special Steels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vardhman Special Steels and Can Fin 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 Can Fin Homes are associated (or correlated) with Vardhman Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vardhman Special Steels has no effect on the direction of Can Fin i.e., Can Fin and Vardhman Special go up and down completely randomly.

Pair Corralation between Can Fin and Vardhman Special

Assuming the 90 days trading horizon Can Fin Homes is expected to generate 0.56 times more return on investment than Vardhman Special. However, Can Fin Homes is 1.77 times less risky than Vardhman Special. It trades about 0.12 of its potential returns per unit of risk. Vardhman Special Steels is currently generating about 0.04 per unit of risk. If you would invest  71,658  in Can Fin Homes on April 25, 2025 and sell it today you would earn a total of  7,082  from holding Can Fin Homes or generate 9.88% return on investment over 90 days.

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

Can Fin Homes  vs.  Vardhman Special Steels

Can Fin Homes

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Can Fin Homes are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Can Fin may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Vardhman Special Steels

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vardhman Special Steels are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Vardhman Special may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Can Fin and Vardhman Special

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

The idea behind Can Fin Homes and Vardhman Special Steels 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.