Correlation Between Discovery Harbour and Calibre Mining

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

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

Diversification Opportunities for Discovery Harbour and Calibre Mining

0.44

Correlation Coefficient

Discovery Harbour  Calibre Mining

Very weak diversification

The 3 months correlation between Discovery and Calibre is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Discovery Harbour Resources 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 Discovery Harbour 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 Discovery Harbour Resources 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 Discovery Harbour i.e., Discovery Harbour and Calibre Mining go up and down completely randomly.

Pair Corralation between Discovery Harbour and Calibre Mining

Assuming the 90 days horizon Discovery Harbour Resources is expected to under-perform the Calibre Mining. But the stock apears to be less risky and, when comparing its historical volatility, Discovery Harbour Resources is 1.4 times less risky than Calibre Mining. The stock trades about -0.18 of its potential returns per unit of risk. The Calibre Mining Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  255.00  in Calibre Mining Corp on October 27, 2024 and sell it today you would earn a total of  2.00  from holding Calibre Mining Corp or generate 0.78% return on investment over 90 days.

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

Discovery Harbour Resources  vs.  Calibre Mining Corp

Discovery Harbour

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Discovery Harbour Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Calibre Mining Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Calibre Mining is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Discovery Harbour and Calibre Mining

The main advantage of trading using opposite Discovery Harbour and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discovery Harbour 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 Discovery Harbour Resources 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.