Correlation Between Caledonia Mining and Phoenix Spree
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Phoenix Spree 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 Phoenix Spree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Phoenix Spree Deutschland, you can compare the effects of market volatilities on Caledonia Mining and Phoenix Spree 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 Phoenix Spree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Phoenix Spree.
Diversification Opportunities for Caledonia Mining and Phoenix Spree
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caledonia and Phoenix is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Phoenix Spree Deutschland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Spree Deutschland 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 Phoenix Spree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Spree Deutschland has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Phoenix Spree go up and down completely randomly.
Pair Corralation between Caledonia Mining and Phoenix Spree
Assuming the 90 days trading horizon Caledonia Mining is expected to under-perform the Phoenix Spree. In addition to that, Caledonia Mining is 4.97 times more volatile than Phoenix Spree Deutschland. It trades about -0.43 of its total potential returns per unit of risk. Phoenix Spree Deutschland is currently generating about -0.32 per unit of volatility. If you would invest 18,000 in Phoenix Spree Deutschland on September 3, 2024 and sell it today you would lose (750.00) from holding Phoenix Spree Deutschland or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caledonia Mining vs. Phoenix Spree Deutschland
Performance |
| Timeline |
| Caledonia Mining |
| Phoenix Spree Deutschland |
Caledonia Mining and Phoenix Spree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Phoenix Spree
The main advantage of trading using opposite Caledonia Mining and Phoenix Spree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Phoenix Spree 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 Phoenix Spree will offset losses from the drop in Phoenix Spree's long position.The idea behind Caledonia Mining and Phoenix Spree Deutschland pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Phoenix Spree vs. Hochschild Mining plc | Phoenix Spree vs. Ryanair Holdings plc | Phoenix Spree vs. Caledonia Mining | Phoenix Spree vs. iShares Physical Silver |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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