Correlation Between Cal-Bay Intl and Halitron

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

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

Diversification Opportunities for Cal-Bay Intl and Halitron

1.0

Correlation Coefficient

Cal-Bay Intl  Halitron

No risk reduction

The 3 months correlation between Cal-Bay and Halitron is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Cal Bay Intl and Halitron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halitron and Cal-Bay Intl 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 Cal Bay Intl are associated (or correlated) with Halitron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halitron has no effect on the direction of Cal-Bay Intl i.e., Cal-Bay Intl and Halitron go up and down completely randomly.

Pair Corralation between Cal-Bay Intl and Halitron

If you would invest  0.01  in Halitron on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Halitron or generate 0.0% return on investment over 90 days.

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

Cal Bay Intl  vs.  Halitron

Cal Bay Intl

Risk-Adjusted Performance

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 fairly strong basic indicators, Cal-Bay Intl is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Halitron

Risk-Adjusted Performance

Very Weak

Over the last 90 days Halitron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Halitron is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cal-Bay Intl and Halitron

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

The idea behind Cal Bay Intl and Halitron 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.