Correlation Between Calian Technologies and OrganiGram Holdings

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

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

Diversification Opportunities for Calian Technologies and OrganiGram Holdings

-0.28

Correlation Coefficient

Calian Technologies  OrganiGram Holdings

Very good diversification

The 3 months correlation between Calian and OrganiGram is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Calian Technologies and OrganiGram Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OrganiGram Holdings 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 OrganiGram Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OrganiGram Holdings has no effect on the direction of Calian Technologies i.e., Calian Technologies and OrganiGram Holdings go up and down completely randomly.

Pair Corralation between Calian Technologies and OrganiGram Holdings

Assuming the 90 days trading horizon Calian Technologies is expected to under-perform the OrganiGram Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Calian Technologies is 2.04 times less risky than OrganiGram Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The OrganiGram Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  228.00  in OrganiGram Holdings on September 4, 2024 and sell it today you would lose (22.00) from holding OrganiGram Holdings or give up 9.65% of portfolio value over 90 days.

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

Calian Technologies  vs.  OrganiGram Holdings

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.

OrganiGram Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OrganiGram Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward 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 OrganiGram Holdings

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

The idea behind Calian Technologies and OrganiGram Holdings 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.