Correlation Between AeroVironment and Calibre Mining

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

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

Diversification Opportunities for AeroVironment and Calibre Mining

-0.41

Correlation Coefficient

AeroVironment  Calibre Mining

Very good diversification

The 3 months correlation between AeroVironment and Calibre is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding AeroVironment 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 AeroVironment 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 AeroVironment 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 AeroVironment i.e., AeroVironment and Calibre Mining go up and down completely randomly.

Pair Corralation between AeroVironment and Calibre Mining

Assuming the 90 days horizon AeroVironment is expected to under-perform the Calibre Mining. In addition to that, AeroVironment is 1.01 times more volatile than Calibre Mining Corp. It trades about -0.12 of its total potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.23 per unit of volatility. If you would invest  142.00  in Calibre Mining Corp on December 26, 2024 and sell it today you would earn a total of  65.00  from holding Calibre Mining Corp or generate 45.77% return on investment over 90 days.

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

AeroVironment  vs.  Calibre Mining Corp

AeroVironment

Risk-Adjusted Performance

Very Weak

Over the last 90 days AeroVironment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Calibre Mining Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain 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 AeroVironment and Calibre Mining

The main advantage of trading using opposite AeroVironment and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AeroVironment 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 AeroVironment 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 Stocks Directory module to find actively traded stocks across global markets.