Correlation Between Chalice Mining and Autosports
Can any of the company-specific risk be diversified away by investing in both Chalice Mining and Autosports 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 Chalice Mining and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chalice Mining Limited and Autosports Group, you can compare the effects of market volatilities on Chalice Mining and Autosports 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 Chalice Mining with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chalice Mining and Autosports.
Diversification Opportunities for Chalice Mining and Autosports
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chalice and Autosports is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Chalice 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 Chalice Mining Limited are associated (or correlated) with Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of Chalice Mining i.e., Chalice Mining and Autosports go up and down completely randomly.
Pair Corralation between Chalice Mining and Autosports
Assuming the 90 days trading horizon Chalice Mining Limited is expected to generate 2.83 times more return on investment than Autosports. However, Chalice Mining is 2.83 times more volatile than Autosports Group. It trades about 0.01 of its potential returns per unit of risk. Autosports Group is currently generating about -0.02 per unit of risk. If you would invest 153.00 in Chalice Mining Limited on September 14, 2024 and sell it today you would lose (32.00) from holding Chalice Mining Limited or give up 20.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chalice Mining Limited vs. Autosports Group
Performance |
| Timeline |
| Chalice Mining |
| Autosports Group |
Chalice Mining and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chalice Mining and Autosports
The main advantage of trading using opposite Chalice Mining and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chalice Mining position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.| Chalice Mining vs. Farm Pride Foods | Chalice Mining vs. Argo Investments | Chalice Mining vs. Mirrabooka Investments | Chalice Mining vs. Queste Communications |
| Autosports vs. Westpac Banking | Autosports vs. National Australia Bank | Autosports vs. National Australia Bank | Autosports vs. National Australia Bank |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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