Correlation Between Calibre Mining and Themac Resources

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

Diversification Opportunities for Calibre Mining and Themac Resources

-0.51

Correlation Coefficient

Calibre Mining  Themac Resources

Excellent diversification

The 3 months correlation between Calibre and Themac is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Themac Resources Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themac Resources 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 Themac Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themac Resources has no effect on the direction of Calibre Mining i.e., Calibre Mining and Themac Resources go up and down completely randomly.

Pair Corralation between Calibre Mining and Themac Resources

Assuming the 90 days trading horizon Calibre Mining is expected to generate 5.57 times less return on investment than Themac Resources. But when comparing it to its historical volatility, Calibre Mining Corp is 2.41 times less risky than Themac Resources. It trades about 0.13 of its potential returns per unit of risk. Themac Resources Group is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  3.50  in Themac Resources Group on October 22, 2024 and sell it today you would earn a total of  1.50  from holding Themac Resources Group or generate 42.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

Calibre Mining Corp  vs.  Themac Resources Group

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.

Themac Resources

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Themac Resources Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Themac Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calibre Mining and Themac Resources

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

The idea behind Calibre Mining Corp and Themac Resources Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.