Correlation Between Calibre Mining and Roche Holding

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

Diversification Opportunities for Calibre Mining and Roche Holding

0.9

Correlation Coefficient

Calibre Mining  Roche Holding

Almost no diversification

The 3 months correlation between Calibre and Roche is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Roche Holding Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roche Holding 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 Roche Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roche Holding has no effect on the direction of Calibre Mining i.e., Calibre Mining and Roche Holding go up and down completely randomly.

Pair Corralation between Calibre Mining and Roche Holding

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 1.62 times more return on investment than Roche Holding. However, Calibre Mining is 1.62 times more volatile than Roche Holding Ltd. It trades about 0.2 of its potential returns per unit of risk. Roche Holding Ltd is currently generating about 0.17 per unit of risk. If you would invest  144.00  in Calibre Mining Corp on December 22, 2024 and sell it today you would earn a total of  55.00  from holding Calibre Mining Corp or generate 38.19% return on investment over 90 days.

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

Calibre Mining Corp  vs.  Roche Holding Ltd

Calibre Mining Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 15 (%) 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.

Roche Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Roche Holding Ltd are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Roche Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calibre Mining and Roche Holding

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

The idea behind Calibre Mining Corp and Roche Holding 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.