Correlation Between Caledonia Mining and Bloomsbury Publishing
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Bloomsbury Publishing 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 Bloomsbury Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Bloomsbury Publishing Plc, you can compare the effects of market volatilities on Caledonia Mining and Bloomsbury Publishing 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 Bloomsbury Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Bloomsbury Publishing.
Diversification Opportunities for Caledonia Mining and Bloomsbury Publishing
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caledonia and Bloomsbury is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Bloomsbury Publishing Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomsbury Publishing 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 Bloomsbury Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomsbury Publishing Plc has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Bloomsbury Publishing go up and down completely randomly.
Pair Corralation between Caledonia Mining and Bloomsbury Publishing
Assuming the 90 days trading horizon Caledonia Mining is expected to under-perform the Bloomsbury Publishing. In addition to that, Caledonia Mining is 1.11 times more volatile than Bloomsbury Publishing Plc. It trades about -0.01 of its total potential returns per unit of risk. Bloomsbury Publishing Plc is currently generating about 0.06 per unit of volatility. If you would invest 41,250 in Bloomsbury Publishing Plc on October 30, 2024 and sell it today you would earn a total of 23,350 from holding Bloomsbury Publishing Plc or generate 56.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caledonia Mining vs. Bloomsbury Publishing Plc
Performance |
| Timeline |
| Caledonia Mining |
| Bloomsbury Publishing Plc |
Caledonia Mining and Bloomsbury Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Bloomsbury Publishing
The main advantage of trading using opposite Caledonia Mining and Bloomsbury Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Bloomsbury Publishing 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 Bloomsbury Publishing will offset losses from the drop in Bloomsbury Publishing's long position.| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Ferrexpo PLC | Caledonia Mining vs. Atalaya Mining |
| Bloomsbury Publishing vs. Golden Metal Resources | Bloomsbury Publishing vs. Gaztransport et Technigaz | Bloomsbury Publishing vs. URU Metals | Bloomsbury Publishing vs. Hochschild Mining 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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