Correlation Between Calian Technologies and Bce

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

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

Diversification Opportunities for Calian Technologies and Bce

0.13

Correlation Coefficient

Calian Technologies  Bce

Average diversification

The 3 months correlation between Calian and Bce is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Calian Technologies and Bce Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bce Inc Pref and Calian 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 Calian Technologies are associated (or correlated) with Bce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bce Inc Pref has no effect on the direction of Calian Technologies i.e., Calian Technologies and Bce go up and down completely randomly.

Pair Corralation between Calian Technologies and Bce

Assuming the 90 days trading horizon Calian Technologies is expected to generate 1.34 times less return on investment than Bce. In addition to that, Calian Technologies is 1.32 times more volatile than Bce Inc Pref. It trades about 0.18 of its total potential returns per unit of risk. Bce Inc Pref is currently generating about 0.31 per unit of volatility. If you would invest  1,600  in Bce Inc Pref on October 23, 2024 and sell it today you would earn a total of  100.00  from holding Bce Inc Pref or generate 6.25% return on investment over 90 days.

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

Calian Technologies  vs.  Bce Inc Pref

Calian Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bce Inc Pref

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bce Inc Pref are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Bce is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calian Technologies and Bce

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

The idea behind Calian Technologies and Bce Inc Pref 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.