Correlation Between Calibre Mining and Alfa Financial

Can any of the company-specific risk be diversified away by investing in both Calibre Mining and Alfa Financial 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 Alfa Financial 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 Alfa Financial Software, you can compare the effects of market volatilities on Calibre Mining and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and Alfa Financial.

Diversification Opportunities for Calibre Mining and Alfa Financial

-0.74

Correlation Coefficient

Calibre Mining  Alfa Financial

Pay attention - limited upside

The 3 months correlation between Calibre and Alfa is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Calibre Mining i.e., Calibre Mining and Alfa Financial go up and down completely randomly.

Pair Corralation between Calibre Mining and Alfa Financial

Assuming the 90 days trading horizon Calibre Mining Corp is expected to under-perform the Alfa Financial. In addition to that, Calibre Mining is 1.32 times more volatile than Alfa Financial Software. It trades about -0.02 of its total potential returns per unit of risk. Alfa Financial Software is currently generating about 0.12 per unit of volatility. If you would invest  238.00  in Alfa Financial Software on September 14, 2024 and sell it today you would earn a total of  34.00  from holding Alfa Financial Software or generate 14.29% return on investment over 90 days.

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

Calibre Mining Corp  vs.  Alfa Financial Software

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 rather sound technical and fundamental indicators, Calibre Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Alfa Financial Software

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alfa Financial Software are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alfa Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calibre Mining and Alfa Financial

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

The idea behind Calibre Mining Corp and Alfa Financial Software 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.