Correlation Between Caledonia Mining and Take Two
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Take Two 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 Caledonia Mining and Take Two into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Take Two Interactive Software, you can compare the effects of market volatilities on Caledonia Mining and Take Two 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 Caledonia Mining with a short position of Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Take Two.
Diversification Opportunities for Caledonia Mining and Take Two
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caledonia and Take is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive and Caledonia 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 Caledonia Mining are associated (or correlated) with Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Take Two go up and down completely randomly.
Pair Corralation between Caledonia Mining and Take Two
Assuming the 90 days trading horizon Caledonia Mining is expected to under-perform the Take Two. In addition to that, Caledonia Mining is 1.78 times more volatile than Take Two Interactive Software. It trades about -0.42 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.36 per unit of volatility. If you would invest 16,417 in Take Two Interactive Software on September 2, 2024 and sell it today you would earn a total of 2,344 from holding Take Two Interactive Software or generate 14.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caledonia Mining vs. Take Two Interactive Software
Performance |
| Timeline |
| Caledonia Mining |
| Take Two Interactive |
Caledonia Mining and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Take Two
The main advantage of trading using opposite Caledonia Mining and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Take Two 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 Take Two will offset losses from the drop in Take Two's long position.| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Centamin PLC | Caledonia Mining vs. Atalaya Mining |
| Take Two vs. Taylor Maritime Investments | Take Two vs. Herald Investment Trust | Take Two vs. Sealed Air Corp | Take Two vs. Intuitive Investments Group |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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