Correlation Between Cal Comp and Eastern Commercial
Can any of the company-specific risk be diversified away by investing in both Cal Comp and Eastern Commercial 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 Eastern Commercial 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 Eastern Commercial Leasing, you can compare the effects of market volatilities on Cal Comp and Eastern Commercial 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 Eastern Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Comp and Eastern Commercial.
Diversification Opportunities for Cal Comp and Eastern Commercial
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cal and Eastern is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cal Comp Electronics Public and Eastern Commercial Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Commercial 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 Eastern Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Commercial has no effect on the direction of Cal Comp i.e., Cal Comp and Eastern Commercial go up and down completely randomly.
Pair Corralation between Cal Comp and Eastern Commercial
Assuming the 90 days trading horizon Cal Comp Electronics Public is expected to generate 1.24 times more return on investment than Eastern Commercial. However, Cal Comp is 1.24 times more volatile than Eastern Commercial Leasing. It trades about -0.2 of its potential returns per unit of risk. Eastern Commercial Leasing is currently generating about -0.31 per unit of risk. If you would invest 985.00 in Cal Comp Electronics Public on October 22, 2024 and sell it today you would lose (145.00) from holding Cal Comp Electronics Public or give up 14.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Cal Comp Electronics Public vs. Eastern Commercial Leasing
Performance |
| Timeline |
| Cal Comp Electronics |
| Eastern Commercial |
Cal Comp and Eastern Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Comp and Eastern Commercial
The main advantage of trading using opposite Cal Comp and Eastern Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Comp position performs unexpectedly, Eastern Commercial 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 Eastern Commercial will offset losses from the drop in Eastern Commercial's long position.| Cal Comp vs. Hana Microelectronics Public | Cal Comp vs. KCE Electronics Public | Cal Comp vs. Dynasty Ceramic Public | Cal Comp vs. Delta Electronics Public |
| Eastern Commercial vs. Chai Watana Tannery | Eastern Commercial vs. EMC Public | Eastern Commercial vs. Asia Plus Group | Eastern Commercial vs. Globlex Holding Management |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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