Correlation Between Calibre Mining and UNICHARM

Can any of the company-specific risk be diversified away by investing in both Calibre Mining and UNICHARM 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 UNICHARM 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 UNICHARM, you can compare the effects of market volatilities on Calibre Mining and UNICHARM 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 UNICHARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and UNICHARM.

Diversification Opportunities for Calibre Mining and UNICHARM

0.72

Correlation Coefficient

Calibre Mining  UNICHARM

Poor diversification

The 3 months correlation between Calibre and UNICHARM is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and UNICHARM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNICHARM 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 UNICHARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNICHARM has no effect on the direction of Calibre Mining i.e., Calibre Mining and UNICHARM go up and down completely randomly.

Pair Corralation between Calibre Mining and UNICHARM

Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 1.14 times more return on investment than UNICHARM. However, Calibre Mining is 1.14 times more volatile than UNICHARM. It trades about -0.1 of its potential returns per unit of risk. UNICHARM is currently generating about -0.21 per unit of risk. If you would invest  173.00  in Calibre Mining Corp on September 28, 2024 and sell it today you would lose (29.00) from holding Calibre Mining Corp or give up 16.76% of portfolio value over 90 days.

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

Calibre Mining Corp  vs.  UNICHARM

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 uncertain 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.

UNICHARM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNICHARM 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 basic 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 Calibre Mining and UNICHARM

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

The idea behind Calibre Mining Corp and UNICHARM 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.