Correlation Between DMC Mining and Chalice Mining

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

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

Diversification Opportunities for DMC Mining and Chalice Mining

0.0

Correlation Coefficient

DMC Mining  Chalice Mining

Pay attention - limited upside

The 3 months correlation between DMC and Chalice is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DMC Mining and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining and DMC 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 DMC Mining are associated (or correlated) with Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of DMC Mining i.e., DMC Mining and Chalice Mining go up and down completely randomly.

Pair Corralation between DMC Mining and Chalice Mining

Assuming the 90 days trading horizon DMC Mining is expected to generate 0.45 times more return on investment than Chalice Mining. However, DMC Mining is 2.23 times less risky than Chalice Mining. It trades about -0.03 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about -0.06 per unit of risk. If you would invest  8.20  in DMC Mining on September 12, 2024 and sell it today you would lose (2.40) from holding DMC Mining or give up 29.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.22%
Values	Daily Returns

DMC Mining  vs.  Chalice Mining Limited

DMC Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DMC Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, DMC Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Chalice Mining

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chalice Mining Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Chalice Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DMC Mining and Chalice Mining

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

The idea behind DMC Mining and Chalice Mining Limited 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.