Correlation Between Pollard Banknote and Calian Technologies
Can any of the company-specific risk be diversified away by investing in both Pollard Banknote 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 Pollard Banknote and Calian Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pollard Banknote Limited and Calian Technologies, you can compare the effects of market volatilities on Pollard Banknote 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 Pollard Banknote with a short position of Calian Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pollard Banknote and Calian Technologies.
Diversification Opportunities for Pollard Banknote and Calian Technologies
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pollard and Calian is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pollard Banknote Limited and Calian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Technologies and Pollard Banknote 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 Pollard Banknote Limited 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 Pollard Banknote i.e., Pollard Banknote and Calian Technologies go up and down completely randomly.
Pair Corralation between Pollard Banknote and Calian Technologies
Assuming the 90 days trading horizon Pollard Banknote Limited is expected to generate 1.74 times more return on investment than Calian Technologies. However, Pollard Banknote is 1.74 times more volatile than Calian Technologies. It trades about 0.04 of its potential returns per unit of risk. Calian Technologies is currently generating about -0.03 per unit of risk. If you would invest 1,845 in Pollard Banknote Limited on August 24, 2024 and sell it today you would earn a total of 685.00 from holding Pollard Banknote Limited or generate 37.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pollard Banknote Limited vs. Calian Technologies
Performance |
| Timeline |
| Pollard Banknote |
| Calian Technologies |
Pollard Banknote and Calian Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pollard Banknote and Calian Technologies
The main advantage of trading using opposite Pollard Banknote and Calian Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pollard Banknote 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.| Pollard Banknote vs. TFI International | Pollard Banknote vs. Baylin Technologies | Pollard Banknote vs. Information Services |
| Calian Technologies vs. ECN Capital Corp | Calian Technologies vs. Martinrea International | Calian Technologies vs. CCL Industries | Calian Technologies vs. FirstService Corp |
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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