Correlation Between Calibre Mining and Gentex

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

Diversification Opportunities for Calibre Mining and Gentex

-0.42

Correlation Coefficient

Calibre Mining  Gentex

Very good diversification

The 3 months correlation between Calibre and Gentex is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Calibre Mining i.e., Calibre Mining and Gentex go up and down completely randomly.

Pair Corralation between Calibre Mining and Gentex

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 2.1 times more return on investment than Gentex. However, Calibre Mining is 2.1 times more volatile than Gentex. It trades about 0.09 of its potential returns per unit of risk. Gentex is currently generating about 0.01 per unit of risk. If you would invest  81.00  in Calibre Mining Corp on October 8, 2024 and sell it today you would earn a total of  68.00  from holding Calibre Mining Corp or generate 83.95% return on investment over 90 days.

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

Calibre Mining Corp  vs.  Gentex

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 uncertain 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.

Gentex

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gentex are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Gentex is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Calibre Mining and Gentex

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

The idea behind Calibre Mining Corp and Gentex 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.