Correlation Between Caledonia Mining and Liechtensteinische
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Liechtensteinische 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 Liechtensteinische into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Liechtensteinische Landesbank AG, you can compare the effects of market volatilities on Caledonia Mining and Liechtensteinische 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 Liechtensteinische. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Liechtensteinische.
Diversification Opportunities for Caledonia Mining and Liechtensteinische
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caledonia and Liechtensteinische is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Liechtensteinische Landesbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liechtensteinische 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 Liechtensteinische. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liechtensteinische has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Liechtensteinische go up and down completely randomly.
Pair Corralation between Caledonia Mining and Liechtensteinische
Assuming the 90 days trading horizon Caledonia Mining is expected to under-perform the Liechtensteinische. In addition to that, Caledonia Mining is 3.4 times more volatile than Liechtensteinische Landesbank AG. It trades about -0.28 of its total potential returns per unit of risk. Liechtensteinische Landesbank AG is currently generating about -0.12 per unit of volatility. If you would invest 7,080 in Liechtensteinische Landesbank AG on September 13, 2024 and sell it today you would lose (130.00) from holding Liechtensteinische Landesbank AG or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Caledonia Mining vs. Liechtensteinische Landesbank
Performance |
| Timeline |
| Caledonia Mining |
| Liechtensteinische |
Caledonia Mining and Liechtensteinische Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Liechtensteinische
The main advantage of trading using opposite Caledonia Mining and Liechtensteinische positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Liechtensteinische 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 Liechtensteinische will offset losses from the drop in Liechtensteinische's long position.| Caledonia Mining vs. Allianz Technology Trust | Caledonia Mining vs. HCA Healthcare | Caledonia Mining vs. Worldwide Healthcare Trust | Caledonia Mining vs. Omega Healthcare Investors |
| Liechtensteinische vs. Telecom Italia SpA | Liechtensteinische vs. Verizon Communications | Liechtensteinische vs. Hochschild Mining plc | Liechtensteinische vs. Bloomsbury Publishing Plc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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