Correlation Between SFC Energy and Calibre Mining

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Can any of the company-specific risk be diversified away by investing in both SFC Energy 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 SFC Energy and Calibre Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFC Energy AG and Calibre Mining Corp, you can compare the effects of market volatilities on SFC Energy 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 SFC Energy with a short position of Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFC Energy and Calibre Mining.

Diversification Opportunities for SFC Energy and Calibre Mining

SFCCalibreDiversified AwaySFCCalibreDiversified Away100%
0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between SFC and Calibre is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SFC Energy AG 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 SFC Energy 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 SFC Energy AG 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 SFC Energy i.e., SFC Energy and Calibre Mining go up and down completely randomly.

Pair Corralation between SFC Energy and Calibre Mining

Assuming the 90 days trading horizon SFC Energy is expected to generate 3.8 times less return on investment than Calibre Mining. But when comparing it to its historical volatility, SFC Energy AG is 1.41 times less risky than Calibre Mining. It trades about 0.06 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  160.00  in Calibre Mining Corp on November 22, 2024 and sell it today you would earn a total of  41.00  from holding Calibre Mining Corp or generate 25.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SFC Energy AG  vs.  Calibre Mining Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-25-20-15-10-50
JavaScript chart by amCharts 3.21.15F3C WCLA
       Timeline  
SFC Energy AG 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SFC Energy AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, SFC Energy may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1616.51717.51818.5
Calibre Mining Corp 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Calibre Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.41.51.61.71.81.92

SFC Energy and Calibre Mining Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.59-5.69-3.78-1.870.01.823.735.657.569.47 0.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15F3C WCLA
       Returns  

Pair Trading with SFC Energy and Calibre Mining

The main advantage of trading using opposite SFC Energy and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFC Energy 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 SFC Energy AG 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.
Check out your portfolio center.
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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