Correlation Between Caledonia Mining and Ocean Harvest
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Ocean Harvest 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 Ocean Harvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Ocean Harvest Technology, you can compare the effects of market volatilities on Caledonia Mining and Ocean Harvest 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 Ocean Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Ocean Harvest.
Diversification Opportunities for Caledonia Mining and Ocean Harvest
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caledonia and Ocean is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Ocean Harvest Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Harvest Technology 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 Ocean Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Harvest Technology has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Ocean Harvest go up and down completely randomly.
Pair Corralation between Caledonia Mining and Ocean Harvest
Assuming the 90 days trading horizon Caledonia Mining is expected to generate 1.38 times less return on investment than Ocean Harvest. But when comparing it to its historical volatility, Caledonia Mining is 1.57 times less risky than Ocean Harvest. It trades about 0.01 of its potential returns per unit of risk. Ocean Harvest Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 950.00 in Ocean Harvest Technology on September 2, 2024 and sell it today you would lose (75.00) from holding Ocean Harvest Technology or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caledonia Mining vs. Ocean Harvest Technology
Performance |
| Timeline |
| Caledonia Mining |
| Ocean Harvest Technology |
Caledonia Mining and Ocean Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Ocean Harvest
The main advantage of trading using opposite Caledonia Mining and Ocean Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Ocean Harvest 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 Ocean Harvest will offset losses from the drop in Ocean Harvest's long position.| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Centamin PLC | Caledonia Mining vs. Atalaya Mining |
| Ocean Harvest vs. GoldMining | Ocean Harvest vs. Invesco Physical Silver | Ocean Harvest vs. Westlake Chemical Corp | Ocean Harvest vs. Games Workshop 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 Stocks Directory module to find actively traded stocks across global markets.
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