Correlation Between Chalice Mining and Sayona Mining

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

Diversification Opportunities for Chalice Mining and Sayona Mining

-0.69

Correlation Coefficient

Chalice Mining  Sayona Mining

Excellent diversification

The 3 months correlation between Chalice and Sayona is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and Sayona Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona Mining 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 Sayona Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sayona Mining has no effect on the direction of Chalice Mining i.e., Chalice Mining and Sayona Mining go up and down completely randomly.

Pair Corralation between Chalice Mining and Sayona Mining

Assuming the 90 days trading horizon Chalice Mining Limited is expected to generate 1.19 times more return on investment than Sayona Mining. However, Chalice Mining is 1.19 times more volatile than Sayona Mining. It trades about 0.1 of its potential returns per unit of risk. Sayona Mining is currently generating about -0.1 per unit of risk. If you would invest  111.00  in Chalice Mining Limited on December 22, 2024 and sell it today you would earn a total of  28.00  from holding Chalice Mining Limited or generate 25.23% 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.  Sayona Mining

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. In spite of comparatively uncertain basic indicators, Chalice Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sayona Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sayona Mining 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Chalice Mining and Sayona Mining

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

The idea behind Chalice Mining Limited and Sayona Mining 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.