Correlation Between Trip Group and Calibre Mining

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

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

Diversification Opportunities for Trip Group and Calibre Mining

-0.53

Correlation Coefficient

Trip Group  Calibre Mining

Excellent diversification

The 3 months correlation between Trip and Calibre is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Trip Group Limited and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp and Trip Group 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 Trip Group Limited are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Trip Group i.e., Trip Group and Calibre Mining go up and down completely randomly.

Pair Corralation between Trip Group and Calibre Mining

Assuming the 90 days horizon Trip Group Limited is expected to under-perform the Calibre Mining. But the stock apears to be less risky and, when comparing its historical volatility, Trip Group Limited is 1.3 times less risky than Calibre Mining. The stock trades about -0.33 of its potential returns per unit of risk. The Calibre Mining Corp is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest  163.00  in Calibre Mining Corp on October 9, 2024 and sell it today you would lose (14.00) from holding Calibre Mining Corp or give up 8.59% of portfolio value over 90 days.

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

Trip Group Limited  vs.  Calibre Mining Corp

Trip Group Limited

Risk-Adjusted Performance

7 of 100

OK

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

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Trip Group and Calibre Mining

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

The idea behind Trip Group Limited and Calibre Mining 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.