Correlation Between DIRTT Environmental and California Nanotechnologies

Can any of the company-specific risk be diversified away by investing in both DIRTT Environmental and California Nanotechnologies 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 DIRTT Environmental and California Nanotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DIRTT Environmental Solutions and California Nanotechnologies Corp, you can compare the effects of market volatilities on DIRTT Environmental and California Nanotechnologies 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 DIRTT Environmental with a short position of California Nanotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIRTT Environmental and California Nanotechnologies.

Diversification Opportunities for DIRTT Environmental and California Nanotechnologies

0.16

Correlation Coefficient

DIRTT Environmental  California Nanotechnologies

Average diversification

The 3 months correlation between DIRTT and California is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding DIRTT Environmental Solutions and California Nanotechnologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Nanotechnologies and DIRTT Environmental 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 DIRTT Environmental Solutions are associated (or correlated) with California Nanotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Nanotechnologies has no effect on the direction of DIRTT Environmental i.e., DIRTT Environmental and California Nanotechnologies go up and down completely randomly.

Pair Corralation between DIRTT Environmental and California Nanotechnologies

Assuming the 90 days trading horizon DIRTT Environmental Solutions is expected to under-perform the California Nanotechnologies. But the stock apears to be less risky and, when comparing its historical volatility, DIRTT Environmental Solutions is 1.22 times less risky than California Nanotechnologies. The stock trades about -0.01 of its potential returns per unit of risk. The California Nanotechnologies Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  57.00  in California Nanotechnologies Corp on April 21, 2025 and sell it today you would lose (3.00) from holding California Nanotechnologies Corp or give up 5.26% of portfolio value over 90 days.

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

DIRTT Environmental Solutions  vs.  California Nanotechnologies Co

DIRTT Environmental

Risk-Adjusted Performance

Very Weak

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

California Nanotechnologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days California Nanotechnologies Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, California Nanotechnologies is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with DIRTT Environmental and California Nanotechnologies

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

The idea behind DIRTT Environmental Solutions and California Nanotechnologies 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.