Correlation Between TKS Technologies and Cal Comp

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

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

Diversification Opportunities for TKS Technologies and Cal Comp

-0.91

Correlation Coefficient

TKS Technologies  Cal Comp

Pay attention - limited upside

The 3 months correlation between TKS and Cal is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding TKS Technologies 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 TKS Technologies 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 TKS Technologies 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 TKS Technologies i.e., TKS Technologies and Cal Comp go up and down completely randomly.

Pair Corralation between TKS Technologies and Cal Comp

Assuming the 90 days trading horizon TKS Technologies Public is expected to under-perform the Cal Comp. But the stock apears to be less risky and, when comparing its historical volatility, TKS Technologies Public is 6.12 times less risky than Cal Comp. The stock trades about -0.35 of its potential returns per unit of risk. The Cal Comp Electronics Public is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  368.00  in Cal Comp Electronics Public on September 13, 2024 and sell it today you would earn a total of  522.00  from holding Cal Comp Electronics Public or generate 141.85% return on investment over 90 days.

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

TKS Technologies Public  vs.  Cal Comp Electronics Public

TKS Technologies Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TKS Technologies Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Cal Comp Electronics

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Comp Electronics Public are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Cal Comp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TKS Technologies and Cal Comp

The main advantage of trading using opposite TKS Technologies and Cal Comp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKS Technologies 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 TKS Technologies 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.