Correlation Between Chalice Mining and Freeport McMoRan

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

By analyzing existing cross correlation between Chalice Mining Limited and Freeport McMoRan, you can compare the effects of market volatilities on Chalice Mining and Freeport McMoRan 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 Chalice Mining with a short position of Freeport McMoRan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chalice Mining and Freeport McMoRan.

Diversification Opportunities for Chalice Mining and Freeport McMoRan

0.83

Correlation Coefficient

Chalice Mining  Freeport McMoRan

Very poor diversification

The 3 months correlation between Chalice and Freeport is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and Freeport McMoRan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeport McMoRan and Chalice 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 Chalice Mining Limited are associated (or correlated) with Freeport McMoRan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeport McMoRan has no effect on the direction of Chalice Mining i.e., Chalice Mining and Freeport McMoRan go up and down completely randomly.

Pair Corralation between Chalice Mining and Freeport McMoRan

Assuming the 90 days horizon Chalice Mining Limited is expected to generate 1.8 times more return on investment than Freeport McMoRan. However, Chalice Mining is 1.8 times more volatile than Freeport McMoRan. It trades about 0.23 of its potential returns per unit of risk. Freeport McMoRan is currently generating about 0.16 per unit of risk. If you would invest  58.00  in Chalice Mining Limited on April 23, 2025 and sell it today you would earn a total of  46.00  from holding Chalice Mining Limited or generate 79.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Chalice Mining Limited  vs.  Freeport McMoRan

Chalice Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chalice Mining Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Chalice Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Freeport McMoRan

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Freeport McMoRan are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Freeport McMoRan reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chalice Mining and Freeport McMoRan

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

The idea behind Chalice Mining Limited and Freeport McMoRan 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.