Correlation Between Caledonia Mining and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Polar Capital 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 Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Polar Capital Technology, you can compare the effects of market volatilities on Caledonia Mining and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Polar Capital.
Diversification Opportunities for Caledonia Mining and Polar Capital
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caledonia and Polar is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Polar Capital go up and down completely randomly.
Pair Corralation between Caledonia Mining and Polar Capital
Assuming the 90 days trading horizon Caledonia Mining is expected to under-perform the Polar Capital. In addition to that, Caledonia Mining is 1.85 times more volatile than Polar Capital Technology. It trades about -0.31 of its total potential returns per unit of risk. Polar Capital Technology is currently generating about 0.05 per unit of volatility. If you would invest 33,700 in Polar Capital Technology on September 13, 2024 and sell it today you would earn a total of 400.00 from holding Polar Capital Technology or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caledonia Mining vs. Polar Capital Technology
Performance |
| Timeline |
| Caledonia Mining |
| Polar Capital Technology |
Caledonia Mining and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Polar Capital
The main advantage of trading using opposite Caledonia Mining and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital'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 |
| Polar Capital vs. Catalyst Media Group | Polar Capital vs. CATLIN GROUP | Polar Capital vs. Tamburi Investment Partners | Polar Capital vs. Magnora ASA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |