Correlation Between Calibre Mining and JAPAN TOBACCO

Can any of the company-specific risk be diversified away by investing in both Calibre Mining and JAPAN TOBACCO 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 JAPAN TOBACCO 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 JAPAN TOBACCO UNSPADR12, you can compare the effects of market volatilities on Calibre Mining and JAPAN TOBACCO 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 JAPAN TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and JAPAN TOBACCO.

Diversification Opportunities for Calibre Mining and JAPAN TOBACCO

0.07

Correlation Coefficient

Calibre Mining  JAPAN TOBACCO

Significant diversification

The 3 months correlation between Calibre and JAPAN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and JAPAN TOBACCO UNSPADR12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN TOBACCO UNSPADR12 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 JAPAN TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN TOBACCO UNSPADR12 has no effect on the direction of Calibre Mining i.e., Calibre Mining and JAPAN TOBACCO go up and down completely randomly.

Pair Corralation between Calibre Mining and JAPAN TOBACCO

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 2.39 times more return on investment than JAPAN TOBACCO. However, Calibre Mining is 2.39 times more volatile than JAPAN TOBACCO UNSPADR12. It trades about 0.22 of its potential returns per unit of risk. JAPAN TOBACCO UNSPADR12 is currently generating about 0.1 per unit of risk. If you would invest  141.00  in Calibre Mining Corp on December 30, 2024 and sell it today you would earn a total of  66.00  from holding Calibre Mining Corp or generate 46.81% return on investment over 90 days.

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

Calibre Mining Corp  vs.  JAPAN TOBACCO UNSPADR12

Calibre Mining Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Calibre Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

JAPAN TOBACCO UNSPADR12

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JAPAN TOBACCO UNSPADR12 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JAPAN TOBACCO may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Calibre Mining and JAPAN TOBACCO

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

The idea behind Calibre Mining Corp and JAPAN TOBACCO UNSPADR12 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.