Correlation Between Calibre Mining and NISSIN FOODS

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

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

Diversification Opportunities for Calibre Mining and NISSIN FOODS

0.71

Correlation Coefficient

Calibre Mining  NISSIN FOODS

Poor diversification

The 3 months correlation between Calibre and NISSIN is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and NISSIN FOODS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSIN FOODS HLDGS and Calibre 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 Calibre Mining Corp are associated (or correlated) with NISSIN FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSIN FOODS HLDGS has no effect on the direction of Calibre Mining i.e., Calibre Mining and NISSIN FOODS go up and down completely randomly.

Pair Corralation between Calibre Mining and NISSIN FOODS

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 1.38 times more return on investment than NISSIN FOODS. However, Calibre Mining is 1.38 times more volatile than NISSIN FOODS HLDGS. It trades about 0.04 of its potential returns per unit of risk. NISSIN FOODS HLDGS is currently generating about 0.02 per unit of risk. If you would invest  157.00  in Calibre Mining Corp on September 12, 2024 and sell it today you would earn a total of  8.00  from holding Calibre Mining Corp or generate 5.1% return on investment over 90 days.

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

Calibre Mining Corp  vs.  NISSIN FOODS HLDGS

Calibre Mining Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Calibre Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NISSIN FOODS HLDGS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NISSIN FOODS HLDGS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, NISSIN FOODS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Calibre Mining and NISSIN FOODS

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

The idea behind Calibre Mining Corp and NISSIN FOODS HLDGS 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.