Correlation Between Cal Comp and GFPT Public
Can any of the company-specific risk be diversified away by investing in both Cal Comp and GFPT Public 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 GFPT Public 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 GFPT Public, you can compare the effects of market volatilities on Cal Comp and GFPT Public 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 GFPT Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Comp and GFPT Public.
Diversification Opportunities for Cal Comp and GFPT Public
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cal and GFPT is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cal Comp Electronics Public and GFPT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFPT Public 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 GFPT Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFPT Public has no effect on the direction of Cal Comp i.e., Cal Comp and GFPT Public go up and down completely randomly.
Pair Corralation between Cal Comp and GFPT Public
Assuming the 90 days trading horizon Cal Comp Electronics Public is expected to generate 2.8 times more return on investment than GFPT Public. However, Cal Comp is 2.8 times more volatile than GFPT Public. It trades about 0.13 of its potential returns per unit of risk. GFPT Public is currently generating about -0.03 per unit of risk. If you would invest 286.00 in Cal Comp Electronics Public on October 22, 2024 and sell it today you would earn a total of 554.00 from holding Cal Comp Electronics Public or generate 193.71% 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. GFPT Public
Performance |
| Timeline |
| Cal Comp Electronics |
| GFPT Public |
Cal Comp and GFPT Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Comp and GFPT Public
The main advantage of trading using opposite Cal Comp and GFPT Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Comp position performs unexpectedly, GFPT Public 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 GFPT Public will offset losses from the drop in GFPT Public'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 |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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