Correlation Between Birchtech Corp and Calian Technologies
Can any of the company-specific risk be diversified away by investing in both Birchtech Corp 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 Birchtech Corp and Calian Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birchtech Corp and Calian Technologies, you can compare the effects of market volatilities on Birchtech Corp 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 Birchtech Corp with a short position of Calian Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchtech Corp and Calian Technologies.
Diversification Opportunities for Birchtech Corp and Calian Technologies
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Birchtech and Calian is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and Calian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Technologies and Birchtech Corp 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 Birchtech Corp 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 Birchtech Corp i.e., Birchtech Corp and Calian Technologies go up and down completely randomly.
Pair Corralation between Birchtech Corp and Calian Technologies
Assuming the 90 days trading horizon Birchtech Corp is expected to under-perform the Calian Technologies. In addition to that, Birchtech Corp is 2.69 times more volatile than Calian Technologies. It trades about -0.13 of its total potential returns per unit of risk. Calian Technologies is currently generating about -0.02 per unit of volatility. If you would invest 6,292 in Calian Technologies on August 27, 2024 and sell it today you would lose (1,416) from holding Calian Technologies or give up 22.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.63% |
| Values | Daily Returns |
Birchtech Corp vs. Calian Technologies
Performance |
| Timeline |
| Birchtech Corp |
| Calian Technologies |
Birchtech Corp and Calian Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birchtech Corp and Calian Technologies
The main advantage of trading using opposite Birchtech Corp and Calian Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchtech Corp 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.| Birchtech Corp vs. NVIDIA CDR | Birchtech Corp vs. Apple Inc CDR | Birchtech Corp vs. Microsoft Corp CDR | Birchtech Corp vs. Alphabet Inc CDR |
| Calian Technologies vs. Enghouse Systems | Calian Technologies vs. Jamieson Wellness | Calian Technologies vs. TECSYS Inc | Calian Technologies vs. Descartes Systems Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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