Correlation Between BCE and Calibre Mining

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

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

Diversification Opportunities for BCE and Calibre Mining

0.12

Correlation Coefficient

BCE  Calibre Mining

Average diversification

The 3 months correlation between BCE and Calibre is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc Pref 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 BCE 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 BCE Inc Pref 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 BCE i.e., BCE and Calibre Mining go up and down completely randomly.

Pair Corralation between BCE and Calibre Mining

Assuming the 90 days trading horizon BCE is expected to generate 10.04 times less return on investment than Calibre Mining. But when comparing it to its historical volatility, BCE Inc Pref is 3.91 times less risky than Calibre Mining. It trades about 0.03 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Calibre Mining Corp on October 26, 2024 and sell it today you would earn a total of  152.00  from holding Calibre Mining Corp or generate 144.76% return on investment over 90 days.

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

BCE Inc Pref  vs.  Calibre Mining Corp

BCE Inc Pref

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BCE Inc Pref are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, BCE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Calibre Mining Corp

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Calibre Mining is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BCE and Calibre Mining

The main advantage of trading using opposite BCE and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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 BCE Inc Pref 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.