Correlation Between Chalice Mining and Calibre Mining

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

Diversification Opportunities for Chalice Mining and Calibre Mining

0.53

Correlation Coefficient

Chalice Mining  Calibre Mining

Very weak diversification

The 3 months correlation between Chalice and Calibre is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited 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 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 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 Chalice Mining i.e., Chalice Mining and Calibre Mining go up and down completely randomly.

Pair Corralation between Chalice Mining and Calibre Mining

Assuming the 90 days horizon Chalice Mining Limited is expected to generate about the same return on investment as Calibre Mining Corp. However, Chalice Mining is 2.03 times more volatile than Calibre Mining Corp. It trades about 0.04 of its potential returns per unit of risk. Calibre Mining Corp is currently producing about 0.08 per unit of risk. If you would invest  98.00  in Calibre Mining Corp on October 7, 2024 and sell it today you would earn a total of  51.00  from holding Calibre Mining Corp or generate 52.04% return on investment over 90 days.

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

Chalice Mining Limited  vs.  Calibre Mining Corp

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

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Chalice Mining and Calibre Mining

The main advantage of trading using opposite Chalice Mining and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chalice Mining 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 Chalice Mining Limited 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.