Correlation Between Calian Technologies and Greenfire Resources

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

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

Diversification Opportunities for Calian Technologies and Greenfire Resources

0.37

Correlation Coefficient

Calian Technologies  Greenfire Resources

Weak diversification

The 3 months correlation between Calian and Greenfire is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Calian Technologies and Greenfire Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenfire Resources 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 Greenfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenfire Resources has no effect on the direction of Calian Technologies i.e., Calian Technologies and Greenfire Resources go up and down completely randomly.

Pair Corralation between Calian Technologies and Greenfire Resources

Assuming the 90 days trading horizon Calian Technologies is expected to under-perform the Greenfire Resources. But the stock apears to be less risky and, when comparing its historical volatility, Calian Technologies is 1.5 times less risky than Greenfire Resources. The stock trades about -0.15 of its potential returns per unit of risk. The Greenfire Resources is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,027  in Greenfire Resources on December 2, 2024 and sell it today you would lose (174.00) from holding Greenfire Resources or give up 16.94% of portfolio value over 90 days.

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

Calian Technologies  vs.  Greenfire Resources

Calian Technologies

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Greenfire Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenfire Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Calian Technologies and Greenfire Resources

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

The idea behind Calian Technologies and Greenfire Resources 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.