Correlation Between Calfrac Well and Open Text

Can any of the company-specific risk be diversified away by investing in both Calfrac Well and Open Text 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 Calfrac Well and Open Text into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Calfrac Well Services and Open Text Corp, you can compare the effects of market volatilities on Calfrac Well and Open Text 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 Calfrac Well with a short position of Open Text. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calfrac Well and Open Text.

Diversification Opportunities for Calfrac Well and Open Text

-0.51

Correlation Coefficient

Calfrac Well  Open Text

Excellent diversification

The 3 months correlation between Calfrac and Open is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Calfrac Well Services and Open Text Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Text Corp and Calfrac Well 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 Calfrac Well Services are associated (or correlated) with Open Text. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Text Corp has no effect on the direction of Calfrac Well i.e., Calfrac Well and Open Text go up and down completely randomly.

Pair Corralation between Calfrac Well and Open Text

Assuming the 90 days trading horizon Calfrac Well Services is expected to under-perform the Open Text. But the stock apears to be less risky and, when comparing its historical volatility, Calfrac Well Services is 1.04 times less risky than Open Text. The stock trades about -0.04 of its potential returns per unit of risk. The Open Text Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  3,849  in Open Text Corp on July 16, 2025 and sell it today you would earn a total of  1,555  from holding Open Text Corp or generate 40.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Calfrac Well Services  vs.  Open Text Corp

Calfrac Well Services

Risk-Adjusted Performance

Weakest

Over the last 90 days Calfrac Well Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Calfrac Well is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Open Text Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Open Text Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Open Text displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calfrac Well and Open Text

The main advantage of trading using opposite Calfrac Well and Open Text positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calfrac Well position performs unexpectedly, Open Text 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 Open Text will offset losses from the drop in Open Text's long position.

The idea behind Calfrac Well Services and Open Text Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.