Correlation Between Advanced Braking and Chalice Mining

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

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

Diversification Opportunities for Advanced Braking and Chalice Mining

-0.41

Correlation Coefficient

Advanced Braking  Chalice Mining

Very good diversification

The 3 months correlation between Advanced and Chalice is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Braking Technology and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining and Advanced Braking 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 Advanced Braking Technology are associated (or correlated) with Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of Advanced Braking i.e., Advanced Braking and Chalice Mining go up and down completely randomly.

Pair Corralation between Advanced Braking and Chalice Mining

Assuming the 90 days trading horizon Advanced Braking is expected to generate 2.9 times less return on investment than Chalice Mining. But when comparing it to its historical volatility, Advanced Braking Technology is 1.94 times less risky than Chalice Mining. It trades about 0.09 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  112.00  in Chalice Mining Limited on October 26, 2024 and sell it today you would earn a total of  8.00  from holding Chalice Mining Limited or generate 7.14% return on investment over 90 days.

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

Advanced Braking Technology  vs.  Chalice Mining Limited

Advanced Braking Tec

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Braking Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Advanced Braking may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Chalice Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chalice Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Advanced Braking and Chalice Mining

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

The idea behind Advanced Braking Technology and Chalice Mining Limited 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.