Correlation Between Calibre Mining and United Overseas
Can any of the company-specific risk be diversified away by investing in both Calibre Mining and United Overseas 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 United Overseas 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 United Overseas Bank, you can compare the effects of market volatilities on Calibre Mining and United Overseas 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 United Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and United Overseas.
Diversification Opportunities for Calibre Mining and United Overseas
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Calibre and United is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and United Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Overseas Bank 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 United Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Overseas Bank has no effect on the direction of Calibre Mining i.e., Calibre Mining and United Overseas go up and down completely randomly.
Pair Corralation between Calibre Mining and United Overseas
Assuming the 90 days trading horizon Calibre Mining Corp is expected to under-perform the United Overseas. In addition to that, Calibre Mining is 2.94 times more volatile than United Overseas Bank. It trades about -0.2 of its total potential returns per unit of risk. United Overseas Bank is currently generating about -0.05 per unit of volatility. If you would invest 2,555 in United Overseas Bank on September 25, 2024 and sell it today you would lose (24.00) from holding United Overseas Bank or give up 0.94% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Calibre Mining Corp vs. United Overseas Bank
Performance |
Timeline |
Calibre Mining Corp |
United Overseas Bank |
Calibre Mining and United Overseas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Calibre Mining and United Overseas
The main advantage of trading using opposite Calibre Mining and United Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining position performs unexpectedly, United Overseas 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 United Overseas will offset losses from the drop in United Overseas' long position.Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc |
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Check out your portfolio center.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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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