Correlation Between Caldwell Partners and Avante Logixx

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

By analyzing existing cross correlation between Caldwell Partners International and Avante Logixx, you can compare the effects of market volatilities on Caldwell Partners and Avante Logixx 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 Caldwell Partners with a short position of Avante Logixx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caldwell Partners and Avante Logixx.

Diversification Opportunities for Caldwell Partners and Avante Logixx

0.58

Correlation Coefficient

Caldwell Partners  Avante Logixx

Very weak diversification

The 3 months correlation between Caldwell and Avante is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Caldwell Partners Internationa and Avante Logixx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avante Logixx and Caldwell Partners 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 Caldwell Partners International are associated (or correlated) with Avante Logixx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avante Logixx has no effect on the direction of Caldwell Partners i.e., Caldwell Partners and Avante Logixx go up and down completely randomly.

Pair Corralation between Caldwell Partners and Avante Logixx

Assuming the 90 days trading horizon Caldwell Partners International is expected to under-perform the Avante Logixx. But the stock apears to be less risky and, when comparing its historical volatility, Caldwell Partners International is 1.14 times less risky than Avante Logixx. The stock trades about -0.09 of its potential returns per unit of risk. The Avante Logixx is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  124.00  in Avante Logixx on December 30, 2024 and sell it today you would lose (18.00) from holding Avante Logixx or give up 14.52% of portfolio value over 90 days.

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

Caldwell Partners Internationa  vs.  Avante Logixx

Caldwell Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caldwell Partners International 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 essential 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.

Avante Logixx

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avante Logixx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Caldwell Partners and Avante Logixx

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

The idea behind Caldwell Partners International and Avante Logixx 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.