Correlation Between K92 Mining and Calibre Mining

Can any of the company-specific risk be diversified away by investing in both K92 Mining 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 K92 Mining and Calibre Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between K92 Mining and Calibre Mining Corp, you can compare the effects of market volatilities on K92 Mining 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 K92 Mining with a short position of Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of K92 Mining and Calibre Mining.

Diversification Opportunities for K92 Mining and Calibre Mining

0.32

Correlation Coefficient

K92 Mining  Calibre Mining

Weak diversification

The 3 months correlation between K92 and Calibre is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding K92 Mining 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 K92 Mining 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 K92 Mining 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 K92 Mining i.e., K92 Mining and Calibre Mining go up and down completely randomly.

Pair Corralation between K92 Mining and Calibre Mining

Assuming the 90 days trading horizon K92 Mining is expected to generate 1.46 times less return on investment than Calibre Mining. In addition to that, K92 Mining is 1.01 times more volatile than Calibre Mining Corp. It trades about 0.08 of its total potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.11 per unit of volatility. If you would invest  126.00  in Calibre Mining Corp on September 2, 2024 and sell it today you would earn a total of  124.00  from holding Calibre Mining Corp or generate 98.41% return on investment over 90 days.

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

K92 Mining  vs.  Calibre Mining Corp

K92 Mining

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in K92 Mining are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, K92 Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Calibre Mining Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Calibre Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with K92 Mining and Calibre Mining

The main advantage of trading using opposite K92 Mining and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K92 Mining 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 K92 Mining 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.