Correlation Between Caledonia Mining and Bisichi Mining
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Bisichi 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 Caledonia Mining and Bisichi Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Bisichi Mining PLC, you can compare the effects of market volatilities on Caledonia Mining and Bisichi 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 Caledonia Mining with a short position of Bisichi Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Bisichi Mining.
Diversification Opportunities for Caledonia Mining and Bisichi Mining
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caledonia and Bisichi is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Bisichi Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bisichi Mining PLC 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 Bisichi Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bisichi Mining PLC has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Bisichi Mining go up and down completely randomly.
Pair Corralation between Caledonia Mining and Bisichi Mining
Assuming the 90 days trading horizon Caledonia Mining is expected to under-perform the Bisichi Mining. But the stock apears to be less risky and, when comparing its historical volatility, Caledonia Mining is 1.04 times less risky than Bisichi Mining. The stock trades about -0.07 of its potential returns per unit of risk. The Bisichi Mining PLC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,750 in Bisichi Mining PLC on September 12, 2024 and sell it today you would earn a total of 750.00 from holding Bisichi Mining PLC or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Caledonia Mining vs. Bisichi Mining PLC
Performance |
| Timeline |
| Caledonia Mining |
| Bisichi Mining PLC |
Caledonia Mining and Bisichi Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Bisichi Mining
The main advantage of trading using opposite Caledonia Mining and Bisichi Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Bisichi 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 Bisichi Mining will offset losses from the drop in Bisichi Mining's long position.| Caledonia Mining vs. Sabre Insurance Group | Caledonia Mining vs. Prudential Financial | Caledonia Mining vs. Sligro Food Group | Caledonia Mining vs. Royal Bank of |
| Bisichi Mining vs. Cairo Communication SpA | Bisichi Mining vs. Primary Health Properties | Bisichi Mining vs. Worldwide Healthcare Trust | Bisichi Mining vs. Induction Healthcare 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 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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