Correlation Between Calibre Mining and ODYSSEY GOLD

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

Diversification Opportunities for Calibre Mining and ODYSSEY GOLD

0.63

Correlation Coefficient

Calibre Mining  ODYSSEY GOLD

Poor diversification

The 3 months correlation between Calibre and ODYSSEY is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and ODYSSEY GOLD LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODYSSEY GOLD LTD 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 ODYSSEY GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODYSSEY GOLD LTD has no effect on the direction of Calibre Mining i.e., Calibre Mining and ODYSSEY GOLD go up and down completely randomly.

Pair Corralation between Calibre Mining and ODYSSEY GOLD

Assuming the 90 days trading horizon Calibre Mining is expected to generate 1.62 times less return on investment than ODYSSEY GOLD. But when comparing it to its historical volatility, Calibre Mining Corp is 4.9 times less risky than ODYSSEY GOLD. It trades about 0.2 of its potential returns per unit of risk. ODYSSEY GOLD LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.85  in ODYSSEY GOLD LTD on December 21, 2024 and sell it today you would earn a total of  0.10  from holding ODYSSEY GOLD LTD or generate 11.76% return on investment over 90 days.

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

Calibre Mining Corp  vs.  ODYSSEY GOLD LTD

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 16 (%) 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.

ODYSSEY GOLD LTD

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ODYSSEY GOLD LTD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ODYSSEY GOLD reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calibre Mining and ODYSSEY GOLD

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

The idea behind Calibre Mining Corp and ODYSSEY GOLD LTD 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.