Correlation Between VIVA WINE and Chalice Mining

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

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

Diversification Opportunities for VIVA WINE and Chalice Mining

-0.59

Correlation Coefficient

VIVA WINE  Chalice Mining

Excellent diversification

The 3 months correlation between VIVA and Chalice is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining and VIVA WINE 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 VIVA WINE GROUP are associated (or correlated) with Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of VIVA WINE i.e., VIVA WINE and Chalice Mining go up and down completely randomly.

Pair Corralation between VIVA WINE and Chalice Mining

Assuming the 90 days horizon VIVA WINE GROUP is expected to under-perform the Chalice Mining. But the stock apears to be less risky and, when comparing its historical volatility, VIVA WINE GROUP is 3.05 times less risky than Chalice Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Chalice Mining Limited is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  61.00  in Chalice Mining Limited on April 25, 2025 and sell it today you would earn a total of  43.00  from holding Chalice Mining Limited or generate 70.49% return on investment over 90 days.

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

VIVA WINE GROUP  vs.  Chalice Mining Limited

VIVA WINE GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days VIVA WINE GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VIVA WINE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Chalice Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIVA WINE and Chalice Mining

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

The idea behind VIVA WINE GROUP and Chalice Mining Limited 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.