Correlation Between MOUNT GIBSON and Calibre Mining

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

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

Diversification Opportunities for MOUNT GIBSON and Calibre Mining

0.09

Correlation Coefficient

MOUNT GIBSON  Calibre Mining

Significant diversification

The 3 months correlation between MOUNT and Calibre is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding MOUNT GIBSON IRON 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 MOUNT GIBSON 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 MOUNT GIBSON IRON 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 MOUNT GIBSON i.e., MOUNT GIBSON and Calibre Mining go up and down completely randomly.

Pair Corralation between MOUNT GIBSON and Calibre Mining

Assuming the 90 days trading horizon MOUNT GIBSON is expected to generate 4.7 times less return on investment than Calibre Mining. But when comparing it to its historical volatility, MOUNT GIBSON IRON is 1.21 times less risky than Calibre Mining. It trades about 0.05 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  144.00  in Calibre Mining Corp on December 23, 2024 and sell it today you would earn a total of  55.00  from holding Calibre Mining Corp or generate 38.19% return on investment over 90 days.

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

MOUNT GIBSON IRON  vs.  Calibre Mining Corp

MOUNT GIBSON IRON

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOUNT GIBSON IRON are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MOUNT GIBSON may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Calibre Mining Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Calibre Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOUNT GIBSON and Calibre Mining

The main advantage of trading using opposite MOUNT GIBSON and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOUNT GIBSON 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 MOUNT GIBSON IRON 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..