Correlation Between West Mining and Callinex Mines
Can any of the company-specific risk be diversified away by investing in both West Mining and Callinex Mines 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 West Mining and Callinex Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between West Mining Corp and Callinex Mines, you can compare the effects of market volatilities on West Mining and Callinex Mines 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 West Mining with a short position of Callinex Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of West Mining and Callinex Mines.
Diversification Opportunities for West Mining and Callinex Mines
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between West and Callinex is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding West Mining Corp and Callinex Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callinex Mines and West 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 West Mining Corp are associated (or correlated) with Callinex Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callinex Mines has no effect on the direction of West Mining i.e., West Mining and Callinex Mines go up and down completely randomly.
Pair Corralation between West Mining and Callinex Mines
Assuming the 90 days horizon West Mining Corp is expected to under-perform the Callinex Mines. In addition to that, West Mining is 3.52 times more volatile than Callinex Mines. It trades about -0.08 of its total potential returns per unit of risk. Callinex Mines is currently generating about -0.07 per unit of volatility. If you would invest 74.00 in Callinex Mines on August 29, 2024 and sell it today you would lose (6.00) from holding Callinex Mines or give up 8.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
West Mining Corp vs. Callinex Mines
Performance |
| Timeline |
| West Mining Corp |
| Callinex Mines |
West Mining and Callinex Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with West Mining and Callinex Mines
The main advantage of trading using opposite West Mining and Callinex Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if West Mining position performs unexpectedly, Callinex Mines 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 Callinex Mines will offset losses from the drop in Callinex Mines' long position.| West Mining vs. Atomic Minerals | West Mining vs. Mundoro Capital | West Mining vs. E79 Resources Corp | West Mining vs. Norra Metals Corp |
| Callinex Mines vs. West Mining Corp | Callinex Mines vs. Flying Nickel Mining | Callinex Mines vs. Forum Energy Metals | Callinex Mines vs. Jourdan Resources |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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