Correlation Between Calix and Clearfield
Can any of the company-specific risk be diversified away by investing in both Calix and Clearfield 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 Calix and Clearfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calix Inc and Clearfield, you can compare the effects of market volatilities on Calix and Clearfield 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 Calix with a short position of Clearfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calix and Clearfield.
Diversification Opportunities for Calix and Clearfield
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Calix and Clearfield is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Calix Inc and Clearfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearfield and Calix 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 Calix Inc are associated (or correlated) with Clearfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearfield has no effect on the direction of Calix i.e., Calix and Clearfield go up and down completely randomly.
Pair Corralation between Calix and Clearfield
Given the investment horizon of 90 days Calix Inc is expected to generate 0.93 times more return on investment than Clearfield. However, Calix Inc is 1.07 times less risky than Clearfield. It trades about -0.04 of its potential returns per unit of risk. Clearfield is currently generating about -0.07 per unit of risk. If you would invest 6,981 in Calix Inc on August 28, 2024 and sell it today you would lose (3,606) from holding Calix Inc or give up 51.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calix Inc vs. Clearfield
Performance |
| Timeline |
| Calix Inc |
| Clearfield |
Calix and Clearfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calix and Clearfield
The main advantage of trading using opposite Calix and Clearfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calix position performs unexpectedly, Clearfield 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 Clearfield will offset losses from the drop in Clearfield's long position.The idea behind Calix Inc and Clearfield 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.| Clearfield vs. Ichor Holdings | Clearfield vs. Fabrinet | Clearfield vs. Hello Group | Clearfield vs. Ultra Clean 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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