Correlation Between Chalice Mining and Strickland Metals

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

Diversification Opportunities for Chalice Mining and Strickland Metals

-0.65

Correlation Coefficient

Chalice Mining  Strickland Metals

Excellent diversification

The 3 months correlation between Chalice and Strickland is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and Strickland Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strickland Metals 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 Strickland Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strickland Metals has no effect on the direction of Chalice Mining i.e., Chalice Mining and Strickland Metals go up and down completely randomly.

Pair Corralation between Chalice Mining and Strickland Metals

Assuming the 90 days trading horizon Chalice Mining is expected to generate 2.62 times less return on investment than Strickland Metals. In addition to that, Chalice Mining is 1.0 times more volatile than Strickland Metals. It trades about 0.01 of its total potential returns per unit of risk. Strickland Metals is currently generating about 0.02 per unit of volatility. If you would invest  9.50  in Strickland Metals on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Strickland Metals or generate 0.0% return on investment over 90 days.

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

Chalice Mining Limited  vs.  Strickland Metals

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. In spite of comparatively stable basic indicators, Chalice Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Strickland Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Strickland Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking signals, Strickland Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Chalice Mining and Strickland Metals

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

The idea behind Chalice Mining Limited and Strickland Metals 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.