Correlation Between Calix and Rimini Street

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

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

Diversification Opportunities for Calix and Rimini Street

-0.55

Correlation Coefficient

Calix  Rimini Street

Excellent diversification

The 3 months correlation between Calix and Rimini is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Calix Inc and Rimini Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimini Street and Calix 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 Calix Inc are associated (or correlated) with Rimini Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimini Street has no effect on the direction of Calix i.e., Calix and Rimini Street go up and down completely randomly.

Pair Corralation between Calix and Rimini Street

Given the investment horizon of 90 days Calix Inc is expected to under-perform the Rimini Street. But the stock apears to be less risky and, when comparing its historical volatility, Calix Inc is 1.18 times less risky than Rimini Street. The stock trades about -0.05 of its potential returns per unit of risk. The Rimini Street is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  173.00  in Rimini Street on September 3, 2024 and sell it today you would earn a total of  43.00  from holding Rimini Street or generate 24.86% return on investment over 90 days.

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

Calix Inc  vs.  Rimini Street

Calix Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calix Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Rimini Street

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rimini Street are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Rimini Street demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calix and Rimini Street

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

The idea behind Calix Inc and Rimini Street 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.