Correlation Between Cal Comp and Land

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

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

Diversification Opportunities for Cal Comp and Land

-0.85

Correlation Coefficient

Cal Comp  Land

Pay attention - limited upside

The 3 months correlation between Cal and Land is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cal Comp Electronics Public and Land and Houses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land and Houses and Cal Comp 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 Cal Comp Electronics Public are associated (or correlated) with Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land and Houses has no effect on the direction of Cal Comp i.e., Cal Comp and Land go up and down completely randomly.

Pair Corralation between Cal Comp and Land

Assuming the 90 days trading horizon Cal Comp Electronics Public is expected to generate 3.23 times more return on investment than Land. However, Cal Comp is 3.23 times more volatile than Land and Houses. It trades about 0.29 of its potential returns per unit of risk. Land and Houses is currently generating about -0.12 per unit of risk. If you would invest  366.00  in Cal Comp Electronics Public on September 16, 2024 and sell it today you would earn a total of  589.00  from holding Cal Comp Electronics Public or generate 160.93% return on investment over 90 days.

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

Cal Comp Electronics Public  vs.  Land and Houses

Cal Comp Electronics

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Comp Electronics Public are ranked lower than 22 (%) 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.

Land and Houses

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Land and Houses 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 fundamental drivers 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.

Pair Trading with Cal Comp and Land

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

The idea behind Cal Comp Electronics Public and Land and Houses 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.