Correlation Between Clifton Mining and Chesapeake Gold

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

By analyzing existing cross correlation between Clifton Mining Co and Chesapeake Gold Corp, you can compare the effects of market volatilities on Clifton Mining and Chesapeake Gold 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 Clifton Mining with a short position of Chesapeake Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clifton Mining and Chesapeake Gold.

Diversification Opportunities for Clifton Mining and Chesapeake Gold

-0.44

Correlation Coefficient

Clifton Mining  Chesapeake Gold

Very good diversification

The 3 months correlation between Clifton and Chesapeake is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Clifton Mining Co and Chesapeake Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Gold Corp and Clifton 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 Clifton Mining Co are associated (or correlated) with Chesapeake Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Gold Corp has no effect on the direction of Clifton Mining i.e., Clifton Mining and Chesapeake Gold go up and down completely randomly.

Pair Corralation between Clifton Mining and Chesapeake Gold

Given the investment horizon of 90 days Clifton Mining is expected to generate 4.43 times less return on investment than Chesapeake Gold. In addition to that, Clifton Mining is 1.39 times more volatile than Chesapeake Gold Corp. It trades about 0.03 of its total potential returns per unit of risk. Chesapeake Gold Corp is currently generating about 0.17 per unit of volatility. If you would invest  59.00  in Chesapeake Gold Corp on December 21, 2024 and sell it today you would earn a total of  33.00  from holding Chesapeake Gold Corp or generate 55.93% return on investment over 90 days.

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

Clifton Mining Co  vs.  Chesapeake Gold Corp

Clifton Mining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clifton Mining Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Clifton Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Chesapeake Gold Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chesapeake Gold Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Chesapeake Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clifton Mining and Chesapeake Gold

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

The idea behind Clifton Mining Co and Chesapeake Gold 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.