Correlation Between Computer Modelling and Calian Technologies

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

By analyzing existing cross correlation between Computer Modelling Group and Calian Technologies, you can compare the effects of market volatilities on Computer Modelling and Calian 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 Computer Modelling with a short position of Calian Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Modelling and Calian Technologies.

Diversification Opportunities for Computer Modelling and Calian Technologies

0.3

Correlation Coefficient

Computer Modelling  Calian Technologies

Weak diversification

The 3 months correlation between Computer and Calian is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Computer Modelling Group and Calian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Technologies and Computer Modelling 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 Computer Modelling Group are associated (or correlated) with Calian Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calian Technologies has no effect on the direction of Computer Modelling i.e., Computer Modelling and Calian Technologies go up and down completely randomly.

Pair Corralation between Computer Modelling and Calian Technologies

Assuming the 90 days trading horizon Computer Modelling Group is expected to under-perform the Calian Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Computer Modelling Group is 1.48 times less risky than Calian Technologies. The stock trades about -0.13 of its potential returns per unit of risk. The Calian Technologies is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  4,821  in Calian Technologies on October 25, 2024 and sell it today you would earn a total of  369.00  from holding Calian Technologies or generate 7.65% return on investment over 90 days.

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

Computer Modelling Group  vs.  Calian Technologies

Computer Modelling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Computer Modelling Group 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 technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Calian Technologies

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calian Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Calian Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Computer Modelling and Calian Technologies

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

The idea behind Computer Modelling Group and Calian Technologies 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.

Check out your portfolio center.

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.