Correlation Between Callinex Mines and West Mining
Can any of the company-specific risk be diversified away by investing in both Callinex Mines and West 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 Callinex Mines and West Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Callinex Mines and West Mining Corp, you can compare the effects of market volatilities on Callinex Mines and West 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 Callinex Mines with a short position of West Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Callinex Mines and West Mining.
Diversification Opportunities for Callinex Mines and West Mining
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Callinex and West is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Callinex Mines and West Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Mining Corp and Callinex Mines 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 Callinex Mines are associated (or correlated) with West Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Mining Corp has no effect on the direction of Callinex Mines i.e., Callinex Mines and West Mining go up and down completely randomly.
Pair Corralation between Callinex Mines and West Mining
Assuming the 90 days horizon Callinex Mines is expected to generate 0.26 times more return on investment than West Mining. However, Callinex Mines is 3.87 times less risky than West Mining. It trades about -0.17 of its potential returns per unit of risk. West Mining Corp is currently generating about -0.2 per unit of risk. If you would invest 58.00 in Callinex Mines on November 22, 2024 and sell it today you would lose (5.00) from holding Callinex Mines or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Callinex Mines vs. West Mining Corp
Performance |
| Timeline |
| Callinex Mines |
| West Mining Corp |
Callinex Mines and West Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Callinex Mines and West Mining
The main advantage of trading using opposite Callinex Mines and West Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Callinex Mines position performs unexpectedly, West 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 West Mining will offset losses from the drop in West Mining's long position.| Callinex Mines vs. West Mining Corp | Callinex Mines vs. Forum Energy Metals | Callinex Mines vs. Jourdan Resources | Callinex Mines vs. Mundoro Capital |
| West Mining vs. Atomic Minerals | West Mining vs. Mundoro Capital | West Mining vs. E79 Resources Corp | West Mining vs. Norra Metals Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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