Correlation Between Caledonia Mining and GoldMining
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and GoldMining 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 GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and GoldMining, you can compare the effects of market volatilities on Caledonia Mining and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and GoldMining.
Diversification Opportunities for Caledonia Mining and GoldMining
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caledonia and GoldMining is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and GoldMining go up and down completely randomly.
Pair Corralation between Caledonia Mining and GoldMining
Assuming the 90 days trading horizon Caledonia Mining is expected to under-perform the GoldMining. In addition to that, Caledonia Mining is 1.02 times more volatile than GoldMining. It trades about -0.42 of its total potential returns per unit of risk. GoldMining is currently generating about 0.01 per unit of volatility. If you would invest 120.00 in GoldMining on September 2, 2024 and sell it today you would earn a total of 0.00 from holding GoldMining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 59.09% |
| Values | Daily Returns |
Caledonia Mining vs. GoldMining
Performance |
| Timeline |
| Caledonia Mining |
| GoldMining |
Caledonia Mining and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and GoldMining
The main advantage of trading using opposite Caledonia Mining and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Centamin PLC | Caledonia Mining vs. Atalaya Mining |
| GoldMining vs. European Metals Holdings | GoldMining vs. Cornish Metals | GoldMining vs. Virgin Wines UK | GoldMining vs. Gaztransport et Technigaz |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |