Correlation Between NTG Nordic and Calibre Mining

Can any of the company-specific risk be diversified away by investing in both NTG Nordic and Calibre 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 NTG Nordic and Calibre Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NTG Nordic Transport and Calibre Mining Corp, you can compare the effects of market volatilities on NTG Nordic and Calibre 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 NTG Nordic with a short position of Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and Calibre Mining.

Diversification Opportunities for NTG Nordic and Calibre Mining

0.38

Correlation Coefficient

NTG Nordic  Calibre Mining

Weak diversification

The 3 months correlation between NTG and Calibre is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp and NTG Nordic 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 NTG Nordic Transport are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of NTG Nordic i.e., NTG Nordic and Calibre Mining go up and down completely randomly.

Pair Corralation between NTG Nordic and Calibre Mining

Assuming the 90 days trading horizon NTG Nordic Transport is expected to generate 0.75 times more return on investment than Calibre Mining. However, NTG Nordic Transport is 1.33 times less risky than Calibre Mining. It trades about -0.11 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.1 per unit of risk. If you would invest  4,010  in NTG Nordic Transport on September 23, 2024 and sell it today you would lose (570.00) from holding NTG Nordic Transport or give up 14.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

NTG Nordic Transport  vs.  Calibre Mining Corp

NTG Nordic Transport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NTG Nordic Transport has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with NTG Nordic and Calibre Mining

The main advantage of trading using opposite NTG Nordic and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic position performs unexpectedly, Calibre 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 Calibre Mining will offset losses from the drop in Calibre Mining's long position.

The idea behind NTG Nordic Transport and Calibre Mining Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.