Correlation Between Calibre Mining and Bce

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

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

Diversification Opportunities for Calibre Mining and Bce

0.42

Correlation Coefficient

Calibre Mining  Bce

Very weak diversification

The 3 months correlation between Calibre and Bce is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Bce Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bce Inc Pref and Calibre 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 Calibre Mining Corp are associated (or correlated) with Bce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bce Inc Pref has no effect on the direction of Calibre Mining i.e., Calibre Mining and Bce go up and down completely randomly.

Pair Corralation between Calibre Mining and Bce

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 4.3 times more return on investment than Bce. However, Calibre Mining is 4.3 times more volatile than Bce Inc Pref. It trades about 0.18 of its potential returns per unit of risk. Bce Inc Pref is currently generating about 0.69 per unit of risk. If you would invest  213.00  in Calibre Mining Corp on October 23, 2024 and sell it today you would earn a total of  22.00  from holding Calibre Mining Corp or generate 10.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Calibre Mining Corp  vs.  Bce Inc Pref

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 latest unfluctuating performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Bce Inc Pref

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bce Inc Pref are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Bce is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calibre Mining and Bce

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

The idea behind Calibre Mining Corp and Bce Inc Pref 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.