Correlation Between CITIC RESHLDGS and Calibre Mining

Can any of the company-specific risk be diversified away by investing in both CITIC RESHLDGS and Calibre 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 CITIC RESHLDGS and Calibre Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CITIC RESHLDGS HD and Calibre Mining Corp, you can compare the effects of market volatilities on CITIC RESHLDGS and Calibre 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 CITIC RESHLDGS with a short position of Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC RESHLDGS and Calibre Mining.

Diversification Opportunities for CITIC RESHLDGS and Calibre Mining

0.62

Correlation Coefficient

CITIC RESHLDGS  Calibre Mining

Poor diversification

The 3 months correlation between CITIC and Calibre is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CITIC RESHLDGS HD and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp and CITIC RESHLDGS 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 CITIC RESHLDGS HD are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of CITIC RESHLDGS i.e., CITIC RESHLDGS and Calibre Mining go up and down completely randomly.

Pair Corralation between CITIC RESHLDGS and Calibre Mining

Assuming the 90 days horizon CITIC RESHLDGS HD is expected to generate 0.83 times more return on investment than Calibre Mining. However, CITIC RESHLDGS HD is 1.21 times less risky than Calibre Mining. It trades about -0.18 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.17 per unit of risk. If you would invest  4.05  in CITIC RESHLDGS HD on October 10, 2024 and sell it today you would lose (0.30) from holding CITIC RESHLDGS HD or give up 7.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

CITIC RESHLDGS HD  vs.  Calibre Mining Corp

CITIC RESHLDGS HD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIC RESHLDGS HD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CITIC RESHLDGS and Calibre Mining

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

The idea behind CITIC RESHLDGS HD and Calibre Mining Corp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.