Correlation Between Calian Technologies and Goeasy

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

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

Diversification Opportunities for Calian Technologies and Goeasy

0.75

Correlation Coefficient

Calian Technologies  Goeasy

Poor diversification

The 3 months correlation between Calian and Goeasy is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Calian Technologies and goeasy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on goeasy 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 Goeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of goeasy has no effect on the direction of Calian Technologies i.e., Calian Technologies and Goeasy go up and down completely randomly.

Pair Corralation between Calian Technologies and Goeasy

Assuming the 90 days trading horizon Calian Technologies is expected to under-perform the Goeasy. But the stock apears to be less risky and, when comparing its historical volatility, Calian Technologies is 1.14 times less risky than Goeasy. The stock trades about -0.08 of its potential returns per unit of risk. The goeasy is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  16,285  in goeasy on December 29, 2024 and sell it today you would lose (1,290) from holding goeasy or give up 7.92% of portfolio value over 90 days.

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

Calian Technologies  vs.  goeasy

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 latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

goeasy

Risk-Adjusted Performance

Very Weak

Over the last 90 days goeasy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Calian Technologies and Goeasy

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

The idea behind Calian Technologies and goeasy 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.