Correlation Between Keg Royalties and Calian Technologies
Can any of the company-specific risk be diversified away by investing in both Keg Royalties 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 Keg Royalties and Calian Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Keg Royalties and Calian Technologies, you can compare the effects of market volatilities on Keg Royalties 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 Keg Royalties with a short position of Calian Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keg Royalties and Calian Technologies.
Diversification Opportunities for Keg Royalties and Calian Technologies
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Keg and Calian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding The Keg Royalties and Calian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Technologies and Keg Royalties 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 The Keg Royalties 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 Keg Royalties i.e., Keg Royalties and Calian Technologies go up and down completely randomly.
Pair Corralation between Keg Royalties and Calian Technologies
Assuming the 90 days trading horizon The Keg Royalties is expected to under-perform the Calian Technologies. But the stock apears to be less risky and, when comparing its historical volatility, The Keg Royalties is 1.98 times less risky than Calian Technologies. The stock trades about -0.3 of its potential returns per unit of risk. The Calian Technologies is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 4,891 in Calian Technologies on August 28, 2024 and sell it today you would lose (93.00) from holding Calian Technologies or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Keg Royalties vs. Calian Technologies
Performance |
| Timeline |
| Keg Royalties |
| Calian Technologies |
Keg Royalties and Calian Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keg Royalties and Calian Technologies
The main advantage of trading using opposite Keg Royalties and Calian Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keg Royalties 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.| Keg Royalties vs. Boston Pizza Royalties | Keg Royalties vs. SIR Royalty Income | Keg Royalties vs. Pizza Pizza Royalty | Keg Royalties vs. Chemtrade Logistics Income |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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