Correlation Between Calibre Mining and Papa Johns

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

Diversification Opportunities for Calibre Mining and Papa Johns

0.32

Correlation Coefficient

Calibre Mining  Papa Johns

Weak diversification

The 3 months correlation between Calibre and Papa is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Papa Johns International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papa Johns International 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 Papa Johns. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papa Johns International has no effect on the direction of Calibre Mining i.e., Calibre Mining and Papa Johns go up and down completely randomly.

Pair Corralation between Calibre Mining and Papa Johns

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 1.25 times more return on investment than Papa Johns. However, Calibre Mining is 1.25 times more volatile than Papa Johns International. It trades about 0.07 of its potential returns per unit of risk. Papa Johns International is currently generating about -0.06 per unit of risk. If you would invest  74.00  in Calibre Mining Corp on October 24, 2024 and sell it today you would earn a total of  88.00  from holding Calibre Mining Corp or generate 118.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Calibre Mining Corp  vs.  Papa Johns International

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Papa Johns International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Papa Johns International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Calibre Mining and Papa Johns

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

The idea behind Calibre Mining Corp and Papa Johns International 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.