Correlation Between Alternative Income and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Alternative Income 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 Alternative Income and Caledonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Income REIT and Caledonia Mining, you can compare the effects of market volatilities on Alternative Income 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 Alternative Income with a short position of Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Income and Caledonia Mining.
Diversification Opportunities for Alternative Income and Caledonia Mining
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alternative and Caledonia is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Income REIT and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining and Alternative Income 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 Alternative Income REIT 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 Alternative Income i.e., Alternative Income and Caledonia Mining go up and down completely randomly.
Pair Corralation between Alternative Income and Caledonia Mining
Assuming the 90 days trading horizon Alternative Income REIT is expected to generate 0.59 times more return on investment than Caledonia Mining. However, Alternative Income REIT is 1.69 times less risky than Caledonia Mining. It trades about 0.07 of its potential returns per unit of risk. Caledonia Mining is currently generating about 0.0 per unit of risk. If you would invest 5,259 in Alternative Income REIT on September 12, 2024 and sell it today you would earn a total of 1,631 from holding Alternative Income REIT or generate 31.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alternative Income REIT vs. Caledonia Mining
Performance |
| Timeline |
| Alternative Income REIT |
| Caledonia Mining |
Alternative Income and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Income and Caledonia Mining
The main advantage of trading using opposite Alternative Income and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Income 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.| Alternative Income vs. Caledonia Mining | Alternative Income vs. Hochschild Mining plc | Alternative Income vs. Coeur Mining | Alternative Income vs. Host Hotels Resorts |
| Caledonia Mining vs. Smithson Investment Trust | Caledonia Mining vs. Lowland Investment Co | Caledonia Mining vs. Monster Beverage Corp | Caledonia Mining vs. Oakley Capital Investments |
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 Stocks Directory module to find actively traded stocks across global markets.
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