Correlation Between Western Copper and Calibre Mining

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Can any of the company-specific risk be diversified away by investing in both Western Copper and Calibre Mining 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 Western Copper and Calibre Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and Calibre Mining Corp, you can compare the effects of market volatilities on Western Copper and Calibre Mining 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 Western Copper with a short position of Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Calibre Mining.

Diversification Opportunities for Western Copper and Calibre Mining

WesternCalibreDiversified AwayWesternCalibreDiversified Away100%
0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Western and Calibre is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp and Western Copper 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 Western Copper and are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Western Copper i.e., Western Copper and Calibre Mining go up and down completely randomly.

Pair Corralation between Western Copper and Calibre Mining

Assuming the 90 days trading horizon Western Copper and is expected to generate 1.36 times more return on investment than Calibre Mining. However, Western Copper is 1.36 times more volatile than Calibre Mining Corp. It trades about -0.01 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.07 per unit of risk. If you would invest  107.00  in Western Copper and on October 19, 2024 and sell it today you would lose (7.00) from holding Western Copper and or give up 6.54% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Western Copper and  vs.  Calibre Mining Corp

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -20-15-10-50510
JavaScript chart by amCharts 3.21.1531WN WCLA
       Timeline  
Western Copper 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Western Copper and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Western Copper is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.9511.051.11.151.2
Calibre Mining Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1.41.51.61.71.81.9

Western Copper and Calibre Mining Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.46-4.09-2.72-1.35-0.02241.32.653.995.346.68 0.0300.0350.0400.0450.050
JavaScript chart by amCharts 3.21.1531WN WCLA
       Returns  

Pair Trading with Western Copper and Calibre Mining

The main advantage of trading using opposite Western Copper and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Calibre Mining 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 Calibre Mining will offset losses from the drop in Calibre Mining's long position.
The idea behind Western Copper and and Calibre Mining 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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