Correlation Between Calian Technologies and Enghouse Systems

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

By analyzing existing cross correlation between Calian Technologies and Enghouse Systems, you can compare the effects of market volatilities on Calian Technologies and Enghouse Systems 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 Enghouse Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calian Technologies and Enghouse Systems.

Diversification Opportunities for Calian Technologies and Enghouse Systems

0.03

Correlation Coefficient

Calian Technologies  Enghouse Systems

Significant diversification

The 3 months correlation between Calian and Enghouse is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Calian Technologies and Enghouse Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enghouse Systems 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 Enghouse Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enghouse Systems has no effect on the direction of Calian Technologies i.e., Calian Technologies and Enghouse Systems go up and down completely randomly.

Pair Corralation between Calian Technologies and Enghouse Systems

Assuming the 90 days trading horizon Calian Technologies is expected to generate 1.08 times more return on investment than Enghouse Systems. However, Calian Technologies is 1.08 times more volatile than Enghouse Systems. It trades about 0.13 of its potential returns per unit of risk. Enghouse Systems is currently generating about 0.02 per unit of risk. If you would invest  4,436  in Calian Technologies on September 4, 2024 and sell it today you would earn a total of  613.00  from holding Calian Technologies or generate 13.82% 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.  Enghouse Systems

Calian Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calian Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Calian Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Enghouse Systems

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enghouse Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Enghouse Systems is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Calian Technologies and Enghouse Systems

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

The idea behind Calian Technologies and Enghouse Systems 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.