Correlation Between Resource Base and Chalice Mining
Can any of the company-specific risk be diversified away by investing in both Resource Base 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 Resource Base and Chalice Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource Base and Chalice Mining Limited, you can compare the effects of market volatilities on Resource Base 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 Resource Base with a short position of Chalice Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource Base and Chalice Mining.
Diversification Opportunities for Resource Base and Chalice Mining
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Resource and Chalice is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Resource Base and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining and Resource Base 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 Resource Base 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 Resource Base i.e., Resource Base and Chalice Mining go up and down completely randomly.
Pair Corralation between Resource Base and Chalice Mining
Assuming the 90 days trading horizon Resource Base is expected to generate 1.2 times more return on investment than Chalice Mining. However, Resource Base is 1.2 times more volatile than Chalice Mining Limited. It trades about -0.03 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about -0.05 per unit of risk. If you would invest 15.00 in Resource Base on November 9, 2024 and sell it today you would lose (12.00) from holding Resource Base or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resource Base vs. Chalice Mining Limited
Performance |
| Timeline |
| Resource Base |
| Chalice Mining |
Resource Base and Chalice Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resource Base and Chalice Mining
The main advantage of trading using opposite Resource Base and Chalice Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resource Base 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.| Resource Base vs. Skycity Entertainment Group | Resource Base vs. AiMedia Technologies | Resource Base vs. Mayfield Childcare | Resource Base vs. Sports Entertainment Group |
| Chalice Mining vs. Cosmo Metals | Chalice Mining vs. Embark Education Group | Chalice Mining vs. Advanced Braking Technology | Chalice Mining vs. G8 Education |
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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