Correlation Between Calibre Mining and GOODTECH ASA

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

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

Diversification Opportunities for Calibre Mining and GOODTECH ASA

0.68

Correlation Coefficient

Calibre Mining  GOODTECH ASA

Poor diversification

The 3 months correlation between Calibre and GOODTECH is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and GOODTECH ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODTECH ASA A and Calibre 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 Calibre Mining Corp are associated (or correlated) with GOODTECH ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODTECH ASA A has no effect on the direction of Calibre Mining i.e., Calibre Mining and GOODTECH ASA go up and down completely randomly.

Pair Corralation between Calibre Mining and GOODTECH ASA

Assuming the 90 days trading horizon Calibre Mining is expected to generate 1.05 times less return on investment than GOODTECH ASA. In addition to that, Calibre Mining is 1.38 times more volatile than GOODTECH ASA A. It trades about 0.14 of its total potential returns per unit of risk. GOODTECH ASA A is currently generating about 0.2 per unit of volatility. If you would invest  76.00  in GOODTECH ASA A on October 11, 2024 and sell it today you would earn a total of  11.00  from holding GOODTECH ASA A or generate 14.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.44%
Values	Daily Returns

Calibre Mining Corp  vs.  GOODTECH ASA A

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

GOODTECH ASA A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GOODTECH ASA A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Calibre Mining and GOODTECH ASA

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

The idea behind Calibre Mining Corp and GOODTECH ASA A 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.