Correlation Between Calibre Mining and Evolution Mining

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

Diversification Opportunities for Calibre Mining and Evolution Mining

-0.21

Correlation Coefficient

Calibre Mining  Evolution Mining

Very good diversification

The 3 months correlation between Calibre and Evolution is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Calibre Mining i.e., Calibre Mining and Evolution Mining go up and down completely randomly.

Pair Corralation between Calibre Mining and Evolution Mining

Assuming the 90 days trading horizon Calibre Mining Corp is expected to under-perform the Evolution Mining. In addition to that, Calibre Mining is 1.2 times more volatile than Evolution Mining Limited. It trades about -0.05 of its total potential returns per unit of risk. Evolution Mining Limited is currently generating about 0.14 per unit of volatility. If you would invest  265.00  in Evolution Mining Limited on September 15, 2024 and sell it today you would earn a total of  51.00  from holding Evolution Mining Limited or generate 19.25% return on investment over 90 days.

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

Calibre Mining Corp  vs.  Evolution Mining Limited

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 latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Evolution Mining

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Evolution Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calibre Mining and Evolution Mining

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

The idea behind Calibre Mining Corp and Evolution Mining Limited 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..