Correlation Between Calibre Mining and Brookfield Investments

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

Diversification Opportunities for Calibre Mining and Brookfield Investments

-0.01

Correlation Coefficient

Calibre Mining  Brookfield Investments

Good diversification

The 3 months correlation between Calibre and Brookfield is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Brookfield Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Investments 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 Brookfield Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Investments has no effect on the direction of Calibre Mining i.e., Calibre Mining and Brookfield Investments go up and down completely randomly.

Pair Corralation between Calibre Mining and Brookfield Investments

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 3.66 times more return on investment than Brookfield Investments. However, Calibre Mining is 3.66 times more volatile than Brookfield Investments. It trades about 0.1 of its potential returns per unit of risk. Brookfield Investments is currently generating about -0.01 per unit of risk. If you would invest  248.00  in Calibre Mining Corp on December 3, 2024 and sell it today you would earn a total of  43.00  from holding Calibre Mining Corp or generate 17.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.61%
Values	Daily Returns

Calibre Mining Corp  vs.  Brookfield Investments

Calibre Mining Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Calibre Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Brookfield Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Brookfield Investments is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calibre Mining and Brookfield Investments

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

The idea behind Calibre Mining Corp and Brookfield Investments 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.