Correlation Between EXPAND and Caldera

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

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

Diversification Opportunities for EXPAND and Caldera

0.34

Correlation Coefficient

EXPAND  Caldera

Weak diversification

The 3 months correlation between EXPAND and Caldera is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding EXPAND and Caldera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldera and EXPAND 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 EXPAND are associated (or correlated) with Caldera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldera has no effect on the direction of EXPAND i.e., EXPAND and Caldera go up and down completely randomly.

Pair Corralation between EXPAND and Caldera

Assuming the 90 days trading horizon EXPAND is expected to generate 20.08 times less return on investment than Caldera. But when comparing it to its historical volatility, EXPAND is 31.93 times less risky than Caldera. It trades about 0.18 of its potential returns per unit of risk. Caldera is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Caldera on July 11, 2025 and sell it today you would earn a total of  53.00  from holding Caldera or generate 9.223372036854776E16% return on investment over 90 days.

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

EXPAND  vs.  Caldera

EXPAND

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EXPAND are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, EXPAND sustained solid returns over the last few months and may actually be approaching a breakup point.

Caldera

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Caldera are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Caldera exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EXPAND and Caldera

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

The idea behind EXPAND and Caldera 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.