Correlation Between Calian Technologies and Exco Technologies

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

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

Diversification Opportunities for Calian Technologies and Exco Technologies

0.68

Correlation Coefficient

Calian Technologies  Exco Technologies

Poor diversification

The 3 months correlation between Calian and Exco is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Calian Technologies and Exco Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exco Technologies 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 Exco Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exco Technologies has no effect on the direction of Calian Technologies i.e., Calian Technologies and Exco Technologies go up and down completely randomly.

Pair Corralation between Calian Technologies and Exco Technologies

Assuming the 90 days trading horizon Calian Technologies is expected to under-perform the Exco Technologies. In addition to that, Calian Technologies is 1.15 times more volatile than Exco Technologies Limited. It trades about -0.02 of its total potential returns per unit of risk. Exco Technologies Limited is currently generating about 0.04 per unit of volatility. If you would invest  739.00  in Exco Technologies Limited on September 5, 2024 and sell it today you would earn a total of  84.00  from holding Exco Technologies Limited or generate 11.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Calian Technologies  vs.  Exco Technologies Limited

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.

Exco Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Exco Technologies Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Exco Technologies is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Calian Technologies and Exco Technologies

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

The idea behind Calian Technologies and Exco Technologies Limited 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.