Correlation Between Focus Graphite and Callinex Mines

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

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

Diversification Opportunities for Focus Graphite and Callinex Mines

-0.45

Correlation Coefficient

Focus Graphite  Callinex Mines

Very good diversification

The 3 months correlation between Focus and Callinex is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Callinex Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callinex Mines and Focus Graphite 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 Focus Graphite are associated (or correlated) with Callinex Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callinex Mines has no effect on the direction of Focus Graphite i.e., Focus Graphite and Callinex Mines go up and down completely randomly.

Pair Corralation between Focus Graphite and Callinex Mines

Assuming the 90 days horizon Focus Graphite is expected to generate 1.32 times less return on investment than Callinex Mines. In addition to that, Focus Graphite is 2.14 times more volatile than Callinex Mines. It trades about 0.01 of its total potential returns per unit of risk. Callinex Mines is currently generating about 0.03 per unit of volatility. If you would invest  60.00  in Callinex Mines on December 22, 2024 and sell it today you would earn a total of  2.00  from holding Callinex Mines or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Focus Graphite  vs.  Callinex Mines

Focus Graphite

Risk-Adjusted Performance

Very Weak

Over the last 90 days Focus Graphite has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile primary indicators, Focus Graphite may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Callinex Mines

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Callinex Mines are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Callinex Mines may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Focus Graphite and Callinex Mines

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

The idea behind Focus Graphite and Callinex Mines 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.