Correlation Between Caledonia Mining and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Aurion Resources 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 Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Aurion Resources, you can compare the effects of market volatilities on Caledonia Mining and Aurion Resources 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 Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Aurion Resources.
Diversification Opportunities for Caledonia Mining and Aurion Resources
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caledonia and Aurion is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources 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 Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Aurion Resources go up and down completely randomly.
Pair Corralation between Caledonia Mining and Aurion Resources
Given the investment horizon of 90 days Caledonia Mining is expected to generate 0.72 times more return on investment than Aurion Resources. However, Caledonia Mining is 1.39 times less risky than Aurion Resources. It trades about 0.03 of its potential returns per unit of risk. Aurion Resources is currently generating about 0.0 per unit of risk. If you would invest 1,014 in Caledonia Mining on September 2, 2024 and sell it today you would earn a total of 40.00 from holding Caledonia Mining or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caledonia Mining vs. Aurion Resources
Performance |
| Timeline |
| Caledonia Mining |
| Aurion Resources |
Caledonia Mining and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Aurion Resources
The main advantage of trading using opposite Caledonia Mining and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Aurion Resources 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 Aurion Resources will offset losses from the drop in Aurion Resources' long position.| Caledonia Mining vs. DRDGOLD Limited ADR | Caledonia Mining vs. Galiano Gold | Caledonia Mining vs. Mastech Holdings | Caledonia Mining vs. EMX Royalty Corp |
| Aurion Resources vs. South32 Limited | Aurion Resources vs. NioCorp Developments Ltd | Aurion Resources vs. HUMANA INC | Aurion Resources vs. SCOR PK |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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