Correlation Between RETAIL FOOD and Chalice Mining

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

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

Diversification Opportunities for RETAIL FOOD and Chalice Mining

-0.5

Correlation Coefficient

RETAIL FOOD  Chalice Mining

Very good diversification

The 3 months correlation between RETAIL and Chalice is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining and RETAIL FOOD 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 RETAIL FOOD GROUP 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 RETAIL FOOD i.e., RETAIL FOOD and Chalice Mining go up and down completely randomly.

Pair Corralation between RETAIL FOOD and Chalice Mining

Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the Chalice Mining. But the stock apears to be less risky and, when comparing its historical volatility, RETAIL FOOD GROUP is 1.61 times less risky than Chalice Mining. The stock trades about -0.13 of its potential returns per unit of risk. The Chalice Mining Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  66.00  in Chalice Mining Limited on December 21, 2024 and sell it today you would earn a total of  19.00  from holding Chalice Mining Limited or generate 28.79% return on investment over 90 days.

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

RETAIL FOOD GROUP  vs.  Chalice Mining Limited

RETAIL FOOD GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days RETAIL FOOD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Chalice Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chalice Mining Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Chalice Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RETAIL FOOD and Chalice Mining

The main advantage of trading using opposite RETAIL FOOD and Chalice Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD 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 RETAIL FOOD GROUP 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.