Correlation Between Chalice Mining and GALENA MINING

Can any of the company-specific risk be diversified away by investing in both Chalice Mining and GALENA 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 Chalice Mining and GALENA MINING 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 GALENA MINING LTD, you can compare the effects of market volatilities on Chalice Mining and GALENA 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 Chalice Mining with a short position of GALENA MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chalice Mining and GALENA MINING.

Diversification Opportunities for Chalice Mining and GALENA MINING

0.0

Correlation Coefficient

Chalice Mining  GALENA MINING

Pay attention - limited upside

The 3 months correlation between Chalice and GALENA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and GALENA MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALENA MINING LTD 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 GALENA MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALENA MINING LTD has no effect on the direction of Chalice Mining i.e., Chalice Mining and GALENA MINING go up and down completely randomly.

Pair Corralation between Chalice Mining and GALENA MINING

Assuming the 90 days horizon Chalice Mining Limited is expected to under-perform the GALENA MINING. But the stock apears to be less risky and, when comparing its historical volatility, Chalice Mining Limited is 1.28 times less risky than GALENA MINING. The stock trades about -0.04 of its potential returns per unit of risk. The GALENA MINING LTD is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  15.00  in GALENA MINING LTD on September 25, 2024 and sell it today you would lose (11.95) from holding GALENA MINING LTD or give up 79.67% of portfolio value over 90 days.

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

Chalice Mining Limited  vs.  GALENA MINING LTD

Chalice Mining

Risk-Adjusted Performance

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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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GALENA MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Chalice Mining and GALENA MINING

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

The idea behind Chalice Mining Limited and GALENA MINING LTD 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.