Correlation Between InPlay Oil and Calian Technologies
Can any of the company-specific risk be diversified away by investing in both InPlay Oil 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 InPlay Oil and Calian Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InPlay Oil Corp and Calian Technologies, you can compare the effects of market volatilities on InPlay Oil 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 InPlay Oil with a short position of Calian Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Calian Technologies.
Diversification Opportunities for InPlay Oil and Calian Technologies
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InPlay and Calian is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Calian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Technologies and InPlay Oil 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 InPlay Oil 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 InPlay Oil i.e., InPlay Oil and Calian Technologies go up and down completely randomly.
Pair Corralation between InPlay Oil and Calian Technologies
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the Calian Technologies. In addition to that, InPlay Oil is 1.55 times more volatile than Calian Technologies. It trades about -0.11 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 4,835 in Calian Technologies on September 3, 2024 and sell it today you would earn a total of 15.00 from holding Calian Technologies or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. Calian Technologies
Performance |
| Timeline |
| InPlay Oil Corp |
| Calian Technologies |
InPlay Oil and Calian Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Calian Technologies
The main advantage of trading using opposite InPlay Oil and Calian Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil 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.| InPlay Oil vs. Gear Energy | InPlay Oil vs. Journey Energy | InPlay Oil vs. Yangarra Resources | InPlay Oil vs. Obsidian Energy |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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