Correlation Between Chalice Mining and PLAYMATES TOYS

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

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

Diversification Opportunities for Chalice Mining and PLAYMATES TOYS

-0.48

Correlation Coefficient

Chalice Mining  PLAYMATES TOYS

Very good diversification

The 3 months correlation between Chalice and PLAYMATES is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS and Chalice Mining 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 Chalice Mining Limited are associated (or correlated) with PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of Chalice Mining i.e., Chalice Mining and PLAYMATES TOYS go up and down completely randomly.

Pair Corralation between Chalice Mining and PLAYMATES TOYS

Assuming the 90 days horizon Chalice Mining Limited is expected to generate 1.23 times more return on investment than PLAYMATES TOYS. However, Chalice Mining is 1.23 times more volatile than PLAYMATES TOYS. It trades about 0.08 of its potential returns per unit of risk. PLAYMATES TOYS is currently generating about 0.01 per unit of risk. If you would invest  65.00  in Chalice Mining Limited on December 28, 2024 and sell it today you would earn a total of  13.00  from holding Chalice Mining Limited or generate 20.0% return on investment over 90 days.

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

Chalice Mining Limited  vs.  PLAYMATES TOYS

Chalice Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chalice Mining Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Chalice Mining reported solid returns over the last few months and may actually be approaching a breakup point.

PLAYMATES TOYS

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLAYMATES TOYS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PLAYMATES TOYS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Chalice Mining and PLAYMATES TOYS

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

The idea behind Chalice Mining Limited and PLAYMATES TOYS 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 Managers module to screen money managers from public funds and ETFs managed around the world.