Correlation Between Caledonia Mining and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Lendinvest PLC 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 Lendinvest PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Lendinvest PLC, you can compare the effects of market volatilities on Caledonia Mining and Lendinvest PLC 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Lendinvest PLC.
Diversification Opportunities for Caledonia Mining and Lendinvest PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caledonia and Lendinvest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Caledonia Mining and Lendinvest PLC
Assuming the 90 days trading horizon Caledonia Mining is expected to under-perform the Lendinvest PLC. In addition to that, Caledonia Mining is 2.42 times more volatile than Lendinvest PLC. It trades about -0.31 of its total potential returns per unit of risk. Lendinvest PLC is currently generating about -0.18 per unit of volatility. If you would invest 2,650 in Lendinvest PLC on September 13, 2024 and sell it today you would lose (100.00) from holding Lendinvest PLC or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caledonia Mining vs. Lendinvest PLC
Performance |
| Timeline |
| Caledonia Mining |
| Lendinvest PLC |
Caledonia Mining and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Lendinvest PLC
The main advantage of trading using opposite Caledonia Mining and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Lendinvest PLC 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC'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 |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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