Correlation Between Colibri Resource and Abcourt Mines

Can any of the company-specific risk be diversified away by investing in both Colibri Resource and Abcourt Mines 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 Colibri Resource and Abcourt Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Colibri Resource Corp and Abcourt Mines, you can compare the effects of market volatilities on Colibri Resource and Abcourt Mines 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 Colibri Resource with a short position of Abcourt Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colibri Resource and Abcourt Mines.

Diversification Opportunities for Colibri Resource and Abcourt Mines

-0.03

Correlation Coefficient

Colibri Resource  Abcourt Mines

Good diversification

The 3 months correlation between Colibri and Abcourt is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Colibri Resource Corp and Abcourt Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcourt Mines and Colibri Resource 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 Colibri Resource Corp are associated (or correlated) with Abcourt Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcourt Mines has no effect on the direction of Colibri Resource i.e., Colibri Resource and Abcourt Mines go up and down completely randomly.

Pair Corralation between Colibri Resource and Abcourt Mines

Assuming the 90 days horizon Colibri Resource Corp is expected to generate 1.48 times more return on investment than Abcourt Mines. However, Colibri Resource is 1.48 times more volatile than Abcourt Mines. It trades about 0.11 of its potential returns per unit of risk. Abcourt Mines is currently generating about 0.05 per unit of risk. If you would invest  2.00  in Colibri Resource Corp on December 21, 2024 and sell it today you would earn a total of  1.00  from holding Colibri Resource Corp or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Colibri Resource Corp  vs.  Abcourt Mines

Colibri Resource Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Colibri Resource Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Colibri Resource showed solid returns over the last few months and may actually be approaching a breakup point.

Abcourt Mines

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Abcourt Mines are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Abcourt Mines showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Colibri Resource and Abcourt Mines

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

The idea behind Colibri Resource Corp and Abcourt Mines 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.