Correlation Between Digital China and Cal Comp
Can any of the company-specific risk be diversified away by investing in both Digital China 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 Digital China and Cal Comp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital China Holdings and Cal Comp Electronics Public, you can compare the effects of market volatilities on Digital China 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 Digital China with a short position of Cal Comp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital China and Cal Comp.
Diversification Opportunities for Digital China and Cal Comp
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Digital and Cal is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Digital China Holdings 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 Digital China 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 Digital China Holdings 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 Digital China i.e., Digital China and Cal Comp go up and down completely randomly.
Pair Corralation between Digital China and Cal Comp
Assuming the 90 days trading horizon Digital China is expected to generate 7.07 times less return on investment than Cal Comp. But when comparing it to its historical volatility, Digital China Holdings is 1.55 times less risky than Cal Comp. It trades about 0.01 of its potential returns per unit of risk. Cal Comp Electronics Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 396.00 in Cal Comp Electronics Public on September 2, 2024 and sell it today you would earn a total of 342.00 from holding Cal Comp Electronics Public or generate 86.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital China Holdings vs. Cal Comp Electronics Public
Performance |
| Timeline |
| Digital China Holdings |
| Cal Comp Electronics |
Digital China and Cal Comp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital China and Cal Comp
The main advantage of trading using opposite Digital China and Cal Comp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital China 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.| Digital China vs. Acer E Enabling Service | Digital China vs. Green World Fintech | Digital China vs. Syscom Computer Engineering |
| Cal Comp vs. Catcher Technology Co | Cal Comp vs. Darfon Electronics Corp | Cal Comp vs. Digital China Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |