Correlation Between Calibre Mining and NGEx Minerals

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

Diversification Opportunities for Calibre Mining and NGEx Minerals

-0.44

Correlation Coefficient

Calibre Mining  NGEx Minerals

Very good diversification

The 3 months correlation between Calibre and NGEx is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and NGEx Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGEx Minerals 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 NGEx Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGEx Minerals has no effect on the direction of Calibre Mining i.e., Calibre Mining and NGEx Minerals go up and down completely randomly.

Pair Corralation between Calibre Mining and NGEx Minerals

Assuming the 90 days trading horizon Calibre Mining Corp is expected to under-perform the NGEx Minerals. In addition to that, Calibre Mining is 1.25 times more volatile than NGEx Minerals. It trades about -0.08 of its total potential returns per unit of risk. NGEx Minerals is currently generating about 0.07 per unit of volatility. If you would invest  1,176  in NGEx Minerals on September 19, 2024 and sell it today you would earn a total of  59.00  from holding NGEx Minerals or generate 5.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.67%
Values	Daily Returns

Calibre Mining Corp  vs.  NGEx Minerals

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.

NGEx Minerals

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NGEx Minerals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, NGEx Minerals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calibre Mining and NGEx Minerals

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

The idea behind Calibre Mining Corp and NGEx Minerals 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.