Correlation Between ISign Media and Calian Technologies

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

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

Diversification Opportunities for ISign Media and Calian Technologies

0.14

Correlation Coefficient

ISign Media  Calian Technologies

Average diversification

The 3 months correlation between ISign and Calian is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding iSign Media Solutions and Calian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Technologies and ISign Media 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 iSign Media Solutions 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 ISign Media i.e., ISign Media and Calian Technologies go up and down completely randomly.

Pair Corralation between ISign Media and Calian Technologies

Assuming the 90 days horizon iSign Media Solutions is expected to under-perform the Calian Technologies. But the stock apears to be less risky and, when comparing its historical volatility, iSign Media Solutions is 1.71 times less risky than Calian Technologies. The stock trades about -0.08 of its potential returns per unit of risk. The Calian Technologies is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  4,939  in Calian Technologies on October 8, 2024 and sell it today you would lose (67.00) from holding Calian Technologies or give up 1.36% of portfolio value over 90 days.

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

iSign Media Solutions  vs.  Calian Technologies

iSign Media Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iSign Media Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ISign Media is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated 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 ISign Media and Calian Technologies

The main advantage of trading using opposite ISign Media and Calian Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISign Media 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 iSign Media Solutions 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.