Correlation Between Financial and Calian Technologies

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

By analyzing existing cross correlation between Financial 15 Split and Calian Technologies, you can compare the effects of market volatilities on Financial 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 Financial with a short position of Calian Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Calian Technologies.

Diversification Opportunities for Financial and Calian Technologies

-0.29

Correlation Coefficient

Financial  Calian Technologies

Very good diversification

The 3 months correlation between Financial and Calian is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and Calian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Technologies and Financial 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 Financial 15 Split 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 Financial i.e., Financial and Calian Technologies go up and down completely randomly.

Pair Corralation between Financial and Calian Technologies

Assuming the 90 days trading horizon Financial 15 Split is expected to generate 0.31 times more return on investment than Calian Technologies. However, Financial 15 Split is 3.24 times less risky than Calian Technologies. It trades about 0.08 of its potential returns per unit of risk. Calian Technologies is currently generating about -0.08 per unit of risk. If you would invest  1,056  in Financial 15 Split on December 29, 2024 and sell it today you would earn a total of  32.00  from holding Financial 15 Split or generate 3.03% return on investment over 90 days.

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

Financial 15 Split  vs.  Calian Technologies

Financial 15 Split

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Financial 15 Split are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Financial and Calian Technologies

The main advantage of trading using opposite Financial and Calian Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial 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 Financial 15 Split 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.