Correlation Between Panasonic Corp and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Panasonic Corp and Caledonia 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 Panasonic Corp and Caledonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panasonic Corp and Caledonia Mining, you can compare the effects of market volatilities on Panasonic Corp and Caledonia 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 Panasonic Corp with a short position of Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panasonic Corp and Caledonia Mining.
Diversification Opportunities for Panasonic Corp and Caledonia Mining
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Panasonic and Caledonia is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Panasonic Corp and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining and Panasonic Corp 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 Panasonic Corp are associated (or correlated) with Caledonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Mining has no effect on the direction of Panasonic Corp i.e., Panasonic Corp and Caledonia Mining go up and down completely randomly.
Pair Corralation between Panasonic Corp and Caledonia Mining
Assuming the 90 days trading horizon Panasonic Corp is expected to generate 1.14 times more return on investment than Caledonia Mining. However, Panasonic Corp is 1.14 times more volatile than Caledonia Mining. It trades about -0.01 of its potential returns per unit of risk. Caledonia Mining is currently generating about -0.03 per unit of risk. If you would invest 160,200 in Panasonic Corp on November 3, 2024 and sell it today you would lose (500.00) from holding Panasonic Corp or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 59.09% |
| Values | Daily Returns |
Panasonic Corp vs. Caledonia Mining
Performance |
| Timeline |
| Panasonic Corp |
| Caledonia Mining |
Panasonic Corp and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panasonic Corp and Caledonia Mining
The main advantage of trading using opposite Panasonic Corp and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panasonic Corp position performs unexpectedly, Caledonia 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 Caledonia Mining will offset losses from the drop in Caledonia Mining's long position.| Panasonic Corp vs. Infrastrutture Wireless Italiane | Panasonic Corp vs. Jacquet Metal Service | Panasonic Corp vs. Empire Metals Limited | Panasonic Corp vs. United Airlines Holdings |
| Caledonia Mining vs. AMG Advanced Metallurgical | Caledonia Mining vs. First Class Metals | Caledonia Mining vs. Silvercorp Metals | Caledonia Mining vs. Science in Sport |
Check out your portfolio center.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.
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