Correlation Between Amaroq Minerals and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Amaroq Minerals 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 Amaroq Minerals and Caledonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amaroq Minerals and Caledonia Mining, you can compare the effects of market volatilities on Amaroq Minerals 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 Amaroq Minerals with a short position of Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amaroq Minerals and Caledonia Mining.
Diversification Opportunities for Amaroq Minerals and Caledonia Mining
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amaroq and Caledonia is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amaroq Minerals and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining and Amaroq Minerals 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 Amaroq Minerals 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 Amaroq Minerals i.e., Amaroq Minerals and Caledonia Mining go up and down completely randomly.
Pair Corralation between Amaroq Minerals and Caledonia Mining
Assuming the 90 days trading horizon Amaroq Minerals is expected to generate 2.59 times more return on investment than Caledonia Mining. However, Amaroq Minerals is 2.59 times more volatile than Caledonia Mining. It trades about 0.03 of its potential returns per unit of risk. Caledonia Mining is currently generating about 0.06 per unit of risk. If you would invest 10,150 in Amaroq Minerals on October 22, 2024 and sell it today you would earn a total of 65.00 from holding Amaroq Minerals or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Amaroq Minerals vs. Caledonia Mining
Performance |
| Timeline |
| Amaroq Minerals |
| Caledonia Mining |
Amaroq Minerals and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amaroq Minerals and Caledonia Mining
The main advantage of trading using opposite Amaroq Minerals and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amaroq Minerals 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.| Amaroq Minerals vs. Air Products Chemicals | Amaroq Minerals vs. URU Metals | Amaroq Minerals vs. Hochschild Mining plc | Amaroq Minerals vs. Wheaton Precious Metals |
| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Ferrexpo PLC | Caledonia Mining vs. Atalaya Mining |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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