Correlation Between Calibre Mining and Waste Management

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

Diversification Opportunities for Calibre Mining and Waste Management

-0.39

Correlation Coefficient

Calibre Mining  Waste Management

Very good diversification

The 3 months correlation between Calibre and Waste is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of Calibre Mining i.e., Calibre Mining and Waste Management go up and down completely randomly.

Pair Corralation between Calibre Mining and Waste Management

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 3.39 times more return on investment than Waste Management. However, Calibre Mining is 3.39 times more volatile than Waste Management. It trades about -0.16 of its potential returns per unit of risk. Waste Management is currently generating about -0.54 per unit of risk. If you would invest  161.00  in Calibre Mining Corp on October 7, 2024 and sell it today you would lose (12.00) from holding Calibre Mining Corp or give up 7.45% of portfolio value over 90 days.

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

Calibre Mining Corp  vs.  Waste Management

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Waste Management

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Waste Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Waste Management is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Calibre Mining and Waste Management

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

The idea behind Calibre Mining Corp and Waste Management 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.