Correlation Between Team Precision and Cal Comp

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

By analyzing existing cross correlation between Team Precision Public and Cal Comp Electronics Public, you can compare the effects of market volatilities on Team Precision and Cal Comp 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 Team Precision with a short position of Cal Comp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Team Precision and Cal Comp.

Diversification Opportunities for Team Precision and Cal Comp

-0.47

Correlation Coefficient

Team Precision  Cal Comp

Very good diversification

The 3 months correlation between Team and Cal is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Team Precision Public and Cal Comp Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Comp Electronics and Team Precision 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 Team Precision Public are associated (or correlated) with Cal Comp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Comp Electronics has no effect on the direction of Team Precision i.e., Team Precision and Cal Comp go up and down completely randomly.

Pair Corralation between Team Precision and Cal Comp

Assuming the 90 days trading horizon Team Precision Public is expected to generate 0.57 times more return on investment than Cal Comp. However, Team Precision Public is 1.76 times less risky than Cal Comp. It trades about 0.08 of its potential returns per unit of risk. Cal Comp Electronics Public is currently generating about -0.14 per unit of risk. If you would invest  251.00  in Team Precision Public on December 28, 2024 and sell it today you would earn a total of  27.00  from holding Team Precision Public or generate 10.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Team Precision Public  vs.  Cal Comp Electronics Public

Team Precision Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Team Precision Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Team Precision may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Cal Comp Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cal Comp Electronics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Team Precision and Cal Comp

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

The idea behind Team Precision Public and Cal Comp Electronics Public 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.