Correlation Between Chalice Mining and Gold Road

Can any of the company-specific risk be diversified away by investing in both Chalice Mining and Gold Road 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 Gold Road 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 Gold Road Resources, you can compare the effects of market volatilities on Chalice Mining and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chalice Mining and Gold Road.

Diversification Opportunities for Chalice Mining and Gold Road

-0.17

Correlation Coefficient

Chalice Mining  Gold Road

Good diversification

The 3 months correlation between Chalice and Gold is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of Chalice Mining i.e., Chalice Mining and Gold Road go up and down completely randomly.

Pair Corralation between Chalice Mining and Gold Road

Assuming the 90 days horizon Chalice Mining Limited is expected to under-perform the Gold Road. In addition to that, Chalice Mining is 1.39 times more volatile than Gold Road Resources. It trades about -0.33 of its total potential returns per unit of risk. Gold Road Resources is currently generating about 0.09 per unit of volatility. If you would invest  115.00  in Gold Road Resources on September 22, 2024 and sell it today you would earn a total of  5.00  from holding Gold Road Resources or generate 4.35% return on investment over 90 days.

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

Chalice Mining Limited  vs.  Gold Road Resources

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. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Gold Road Resources

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Road Resources are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gold Road reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chalice Mining and Gold Road

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

The idea behind Chalice Mining Limited and Gold Road Resources 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.