Correlation Between Chalice Mining and Hammer Metals
Can any of the company-specific risk be diversified away by investing in both Chalice Mining and Hammer Metals 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 Hammer Metals 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 Hammer Metals, you can compare the effects of market volatilities on Chalice Mining and Hammer Metals 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 Hammer Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chalice Mining and Hammer Metals.
Diversification Opportunities for Chalice Mining and Hammer Metals
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chalice and Hammer is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and Hammer Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammer Metals 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 Hammer Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammer Metals has no effect on the direction of Chalice Mining i.e., Chalice Mining and Hammer Metals go up and down completely randomly.
Pair Corralation between Chalice Mining and Hammer Metals
Assuming the 90 days trading horizon Chalice Mining Limited is expected to under-perform the Hammer Metals. But the stock apears to be less risky and, when comparing its historical volatility, Chalice Mining Limited is 2.03 times less risky than Hammer Metals. The stock trades about -0.07 of its potential returns per unit of risk. The Hammer Metals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3.30 in Hammer Metals on October 16, 2024 and sell it today you would earn a total of 0.20 from holding Hammer Metals or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chalice Mining Limited vs. Hammer Metals
Performance |
| Timeline |
| Chalice Mining |
| Hammer Metals |
Chalice Mining and Hammer Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chalice Mining and Hammer Metals
The main advantage of trading using opposite Chalice Mining and Hammer Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chalice Mining position performs unexpectedly, Hammer Metals 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 Hammer Metals will offset losses from the drop in Hammer Metals' long position.| Chalice Mining vs. Alternative Investment Trust | Chalice Mining vs. Dalaroo Metals | Chalice Mining vs. Pinnacle Investment Management | Chalice Mining vs. DY6 Metals |
| Hammer Metals vs. Chalice Mining Limited | Hammer Metals vs. Andean Silver Limited | Hammer Metals vs. The Environmental Group | Hammer Metals vs. Galena Mining |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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