Correlation Between Guru Organic and Calian Technologies

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

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

Diversification Opportunities for Guru Organic and Calian Technologies

0.53

Correlation Coefficient

Guru Organic  Calian Technologies

Very weak diversification

The 3 months correlation between Guru and Calian is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Guru Organic Energy and Calian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Technologies and Guru Organic 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 Guru Organic Energy 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 Guru Organic i.e., Guru Organic and Calian Technologies go up and down completely randomly.

Pair Corralation between Guru Organic and Calian Technologies

Assuming the 90 days trading horizon Guru Organic Energy is expected to under-perform the Calian Technologies. In addition to that, Guru Organic is 1.68 times more volatile than Calian Technologies. It trades about -0.12 of its total potential returns per unit of risk. Calian Technologies is currently generating about -0.04 per unit of volatility. If you would invest  5,536  in Calian Technologies on October 9, 2024 and sell it today you would lose (664.00) from holding Calian Technologies or give up 11.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.39%
Values	Daily Returns

Guru Organic Energy  vs.  Calian Technologies

Guru Organic Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guru Organic Energy 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 basic 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

0 of 100

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 very healthy basic indicators, Calian Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Guru Organic and Calian Technologies

The main advantage of trading using opposite Guru Organic and Calian Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guru Organic 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 Guru Organic Energy 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..