Correlation Between Axis Technologies and Cal Bay

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

By analyzing existing cross correlation between Axis Technologies Group and Cal Bay Intl, you can compare the effects of market volatilities on Axis Technologies and Cal Bay 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 Axis Technologies with a short position of Cal Bay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axis Technologies and Cal Bay.

Diversification Opportunities for Axis Technologies and Cal Bay

0.0

Correlation Coefficient

Axis Technologies  Cal Bay

Pay attention - limited upside

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

Pair Corralation between Axis Technologies and Cal Bay

Given the investment horizon of 90 days Axis Technologies Group is expected to generate 5.23 times more return on investment than Cal Bay. However, Axis Technologies is 5.23 times more volatile than Cal Bay Intl. It trades about 0.22 of its potential returns per unit of risk. Cal Bay Intl is currently generating about -0.13 per unit of risk. If you would invest  0.04  in Axis Technologies Group on September 12, 2024 and sell it today you would earn a total of  0.10  from holding Axis Technologies Group or generate 250.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Axis Technologies Group  vs.  Cal Bay Intl

Axis Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axis Technologies Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Axis Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Cal Bay Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cal Bay Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Axis Technologies and Cal Bay

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

The idea behind Axis Technologies Group and Cal Bay Intl 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..