Correlation Between PLATO GOLD and Calibre Mining

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

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

Diversification Opportunities for PLATO GOLD and Calibre Mining

-0.28

Correlation Coefficient

PLATO GOLD  Calibre Mining

Very good diversification

The 3 months correlation between PLATO and Calibre is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding PLATO GOLD P 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 PLATO GOLD 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 PLATO GOLD P 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 PLATO GOLD i.e., PLATO GOLD and Calibre Mining go up and down completely randomly.

Pair Corralation between PLATO GOLD and Calibre Mining

Assuming the 90 days horizon PLATO GOLD P is expected to generate 10.0 times more return on investment than Calibre Mining. However, PLATO GOLD is 10.0 times more volatile than Calibre Mining Corp. It trades about 0.08 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.06 per unit of risk. If you would invest  1.05  in PLATO GOLD P on March 28, 2024 and sell it today you would lose (0.25) from holding PLATO GOLD P or give up 23.81% of portfolio value over 90 days.

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

PLATO GOLD P  vs.  Calibre Mining Corp

PLATO GOLD P

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PLATO GOLD P are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PLATO GOLD reported solid returns over the last few months and may actually be approaching a breakup point.

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 basic indicators, Calibre Mining may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with PLATO GOLD and Calibre Mining

The main advantage of trading using opposite PLATO GOLD and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLATO GOLD 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 PLATO GOLD P 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..