Correlation Between Bayer AG and Chalice Mining
Can any of the company-specific risk be diversified away by investing in both Bayer AG and Chalice 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 Bayer AG and Chalice Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayer AG NA and Chalice Mining Limited, you can compare the effects of market volatilities on Bayer AG and Chalice 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 Bayer AG with a short position of Chalice Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayer AG and Chalice Mining.
Diversification Opportunities for Bayer AG and Chalice Mining
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bayer and Chalice is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bayer AG NA and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining and Bayer AG 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 Bayer AG NA are associated (or correlated) with Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of Bayer AG i.e., Bayer AG and Chalice Mining go up and down completely randomly.
Pair Corralation between Bayer AG and Chalice Mining
Assuming the 90 days trading horizon Bayer AG NA is expected to generate 0.46 times more return on investment than Chalice Mining. However, Bayer AG NA is 2.16 times less risky than Chalice Mining. It trades about -0.04 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about -0.3 per unit of risk. If you would invest 2,011 in Bayer AG NA on September 19, 2024 and sell it today you would lose (34.00) from holding Bayer AG NA or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bayer AG NA vs. Chalice Mining Limited
Performance |
| Timeline |
| Bayer AG NA |
| Chalice Mining |
Bayer AG and Chalice Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayer AG and Chalice Mining
The main advantage of trading using opposite Bayer AG and Chalice Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayer AG position performs unexpectedly, Chalice 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 Chalice Mining will offset losses from the drop in Chalice Mining's long position.| Bayer AG vs. Chalice Mining Limited | Bayer AG vs. Evolution Mining Limited | Bayer AG vs. GALENA MINING LTD | Bayer AG vs. Harmony Gold Mining |
| Chalice Mining vs. Superior Plus Corp | Chalice Mining vs. SIVERS SEMICONDUCTORS AB | Chalice Mining vs. Norsk Hydro ASA | Chalice Mining vs. Reliance Steel Aluminum |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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