Correlation Between Aris Gold and Calibre Mining

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

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

Diversification Opportunities for Aris Gold and Calibre Mining

0.6

Correlation Coefficient

Aris Gold  Calibre Mining

Poor diversification

The 3 months correlation between Aris and Calibre is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aris Gold Corp 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 Aris Gold 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 Aris Gold Corp 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 Aris Gold i.e., Aris Gold and Calibre Mining go up and down completely randomly.

Pair Corralation between Aris Gold and Calibre Mining

Assuming the 90 days trading horizon Aris Gold Corp is expected to under-perform the Calibre Mining. In addition to that, Aris Gold is 1.09 times more volatile than Calibre Mining Corp. It trades about -0.09 of its total potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.05 per unit of volatility. If you would invest  262.00  in Calibre Mining Corp on September 14, 2024 and sell it today you would lose (24.00) from holding Calibre Mining Corp or give up 9.16% of portfolio value over 90 days.

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

Aris Gold Corp  vs.  Calibre Mining Corp

Aris Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aris Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Aris Gold and Calibre Mining

The main advantage of trading using opposite Aris Gold and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aris Gold 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 Aris Gold Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.