Correlation Between Calibre Mining and K92 Mining

Can any of the company-specific risk be diversified away by investing in both Calibre Mining and K92 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 Calibre Mining and K92 Mining 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 K92 Mining, you can compare the effects of market volatilities on Calibre Mining and K92 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 Calibre Mining with a short position of K92 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and K92 Mining.

Diversification Opportunities for Calibre Mining and K92 Mining

0.59

Correlation Coefficient

Calibre Mining  K92 Mining

Very weak diversification

The 3 months correlation between Calibre and K92 is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and K92 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K92 Mining 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 K92 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K92 Mining has no effect on the direction of Calibre Mining i.e., Calibre Mining and K92 Mining go up and down completely randomly.

Pair Corralation between Calibre Mining and K92 Mining

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 0.97 times more return on investment than K92 Mining. However, Calibre Mining Corp is 1.03 times less risky than K92 Mining. It trades about 0.24 of its potential returns per unit of risk. K92 Mining is currently generating about 0.19 per unit of risk. If you would invest  210.00  in Calibre Mining Corp on December 29, 2024 and sell it today you would earn a total of  112.00  from holding Calibre Mining Corp or generate 53.33% return on investment over 90 days.

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

Calibre Mining Corp  vs.  K92 Mining

Calibre Mining Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 18 (%) 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.

K92 Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in K92 Mining are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, K92 Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calibre Mining and K92 Mining

The main advantage of trading using opposite Calibre Mining and K92 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining position performs unexpectedly, K92 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 K92 Mining will offset losses from the drop in K92 Mining's long position.

The idea behind Calibre Mining Corp and K92 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.