Correlation Between Communication System and Cal Comp

Can any of the company-specific risk be diversified away by investing in both Communication System and Cal Comp 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 Communication System and Cal Comp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Communication System Solution and Cal Comp Electronics Public, you can compare the effects of market volatilities on Communication System and Cal Comp 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 Communication System with a short position of Cal Comp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication System and Cal Comp.

Diversification Opportunities for Communication System and Cal Comp

0.59

Correlation Coefficient

Communication System  Cal Comp

Very weak diversification

The 3 months correlation between Communication and Cal is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Communication System Solution and Cal Comp Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Comp Electronics and Communication System 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 Communication System Solution are associated (or correlated) with Cal Comp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Comp Electronics has no effect on the direction of Communication System i.e., Communication System and Cal Comp go up and down completely randomly.

Pair Corralation between Communication System and Cal Comp

Assuming the 90 days trading horizon Communication System is expected to generate 6.3 times less return on investment than Cal Comp. But when comparing it to its historical volatility, Communication System Solution is 2.41 times less risky than Cal Comp. It trades about 0.02 of its potential returns per unit of risk. Cal Comp Electronics Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  595.00  in Cal Comp Electronics Public on April 30, 2025 and sell it today you would earn a total of  50.00  from holding Cal Comp Electronics Public or generate 8.4% return on investment over 90 days.

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

Communication System Solution  vs.  Cal Comp Electronics Public

Communication System

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Communication System Solution are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Communication System is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Cal Comp Electronics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Comp Electronics Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Cal Comp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Communication System and Cal Comp

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

The idea behind Communication System Solution and Cal Comp Electronics Public 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.