Correlation Between Bellevue Gold and Collective Mining

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

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

Diversification Opportunities for Bellevue Gold and Collective Mining

0.47

Correlation Coefficient

Bellevue Gold  Collective Mining

Very weak diversification

The 3 months correlation between Bellevue and Collective is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bellevue Gold Limited and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining and Bellevue 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 Bellevue Gold Limited are associated (or correlated) with Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of Bellevue Gold i.e., Bellevue Gold and Collective Mining go up and down completely randomly.

Pair Corralation between Bellevue Gold and Collective Mining

Assuming the 90 days horizon Bellevue Gold is expected to generate 6.45 times less return on investment than Collective Mining. In addition to that, Bellevue Gold is 1.22 times more volatile than Collective Mining. It trades about 0.01 of its total potential returns per unit of risk. Collective Mining is currently generating about 0.08 per unit of volatility. If you would invest  317.00  in Collective Mining on September 3, 2024 and sell it today you would earn a total of  14.00  from holding Collective Mining or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	35.38%
Values	Daily Returns

Bellevue Gold Limited  vs.  Collective Mining

Bellevue Gold Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bellevue Gold Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Bellevue Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Collective Mining

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Collective Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile primary indicators, Collective Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bellevue Gold and Collective Mining

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

The idea behind Bellevue Gold Limited and Collective Mining 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.