Correlation Between Chalice Mining and Kenorland Minerals

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

Diversification Opportunities for Chalice Mining and Kenorland Minerals

0.46

Correlation Coefficient

Chalice Mining  Kenorland Minerals

Very weak diversification

The 3 months correlation between Chalice and Kenorland is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and Kenorland Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenorland Minerals 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 Kenorland Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenorland Minerals has no effect on the direction of Chalice Mining i.e., Chalice Mining and Kenorland Minerals go up and down completely randomly.

Pair Corralation between Chalice Mining and Kenorland Minerals

Assuming the 90 days horizon Chalice Mining Limited is expected to generate 2.28 times more return on investment than Kenorland Minerals. However, Chalice Mining is 2.28 times more volatile than Kenorland Minerals. It trades about 0.09 of its potential returns per unit of risk. Kenorland Minerals is currently generating about 0.06 per unit of risk. If you would invest  64.00  in Chalice Mining Limited on December 30, 2024 and sell it today you would earn a total of  21.00  from holding Chalice Mining Limited or generate 32.81% 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.  Kenorland Minerals

Chalice Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chalice Mining Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Chalice Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Kenorland Minerals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kenorland Minerals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Kenorland Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chalice Mining and Kenorland Minerals

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

The idea behind Chalice Mining Limited and Kenorland Minerals 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.