Correlation Between Calibre Mining and CN DATANG

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

Diversification Opportunities for Calibre Mining and CN DATANG

-0.74

Correlation Coefficient

Calibre Mining  CN DATANG

Pay attention - limited upside

The 3 months correlation between Calibre and DT7 is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and CN DATANG C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN DATANG C 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 CN DATANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN DATANG C has no effect on the direction of Calibre Mining i.e., Calibre Mining and CN DATANG go up and down completely randomly.

Pair Corralation between Calibre Mining and CN DATANG

Assuming the 90 days trading horizon Calibre Mining is expected to generate 1.06 times less return on investment than CN DATANG. But when comparing it to its historical volatility, Calibre Mining Corp is 1.52 times less risky than CN DATANG. It trades about 0.07 of its potential returns per unit of risk. CN DATANG C is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  14.00  in CN DATANG C on October 22, 2024 and sell it today you would earn a total of  10.00  from holding CN DATANG C or generate 71.43% 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.  CN DATANG C

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 latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

CN DATANG C

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CN DATANG C are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CN DATANG may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Calibre Mining and CN DATANG

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

The idea behind Calibre Mining Corp and CN DATANG C 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.