Correlation Between Calibre Mining and Fortis Pref

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

Diversification Opportunities for Calibre Mining and Fortis Pref

-0.13

Correlation Coefficient

Calibre Mining  Fortis Pref

Good diversification

The 3 months correlation between Calibre and Fortis is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Fortis Pref M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Pref M 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 Fortis Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Pref M has no effect on the direction of Calibre Mining i.e., Calibre Mining and Fortis Pref go up and down completely randomly.

Pair Corralation between Calibre Mining and Fortis Pref

Assuming the 90 days trading horizon Calibre Mining Corp is expected to under-perform the Fortis Pref. In addition to that, Calibre Mining is 4.57 times more volatile than Fortis Pref M. It trades about -0.2 of its total potential returns per unit of risk. Fortis Pref M is currently generating about 0.4 per unit of volatility. If you would invest  2,045  in Fortis Pref M on October 9, 2024 and sell it today you would earn a total of  92.00  from holding Fortis Pref M or generate 4.5% return on investment over 90 days.

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

Calibre Mining Corp  vs.  Fortis Pref M

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 unfluctuating performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Fortis Pref M

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fortis Pref M are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Fortis Pref 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 Fortis Pref

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

The idea behind Calibre Mining Corp and Fortis Pref M 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.