Correlation Between DLF and Silgo Retail

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

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

Diversification Opportunities for DLF and Silgo Retail

0.76

Correlation Coefficient

DLF  Silgo Retail

Poor diversification

The 3 months correlation between DLF and Silgo is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding DLF Limited and Silgo Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgo Retail Limited and DLF 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 DLF Limited are associated (or correlated) with Silgo Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgo Retail Limited has no effect on the direction of DLF i.e., DLF and Silgo Retail go up and down completely randomly.

Pair Corralation between DLF and Silgo Retail

Assuming the 90 days trading horizon DLF Limited is expected to generate 0.92 times more return on investment than Silgo Retail. However, DLF Limited is 1.09 times less risky than Silgo Retail. It trades about 0.18 of its potential returns per unit of risk. Silgo Retail Limited is currently generating about 0.14 per unit of risk. If you would invest  68,500  in DLF Limited on April 22, 2025 and sell it today you would earn a total of  16,760  from holding DLF Limited or generate 24.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

DLF Limited  vs.  Silgo Retail Limited

DLF Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DLF Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, DLF exhibited solid returns over the last few months and may actually be approaching a breakup point.

Silgo Retail Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Silgo Retail Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Silgo Retail displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DLF and Silgo Retail

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

The idea behind DLF Limited and Silgo Retail 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.