Correlation Between Caledonia Mining and Galiano Gold
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Galiano Gold 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 Galiano Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Galiano Gold, you can compare the effects of market volatilities on Caledonia Mining and Galiano Gold 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 Galiano Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Galiano Gold.
Diversification Opportunities for Caledonia Mining and Galiano Gold
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caledonia and Galiano is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Galiano Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galiano Gold 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 Galiano Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galiano Gold has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Galiano Gold go up and down completely randomly.
Pair Corralation between Caledonia Mining and Galiano Gold
Given the investment horizon of 90 days Caledonia Mining is expected to under-perform the Galiano Gold. In addition to that, Caledonia Mining is 1.12 times more volatile than Galiano Gold. It trades about -0.46 of its total potential returns per unit of risk. Galiano Gold is currently generating about -0.27 per unit of volatility. If you would invest 174.00 in Galiano Gold on August 29, 2024 and sell it today you would lose (34.00) from holding Galiano Gold or give up 19.54% 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. Galiano Gold
Performance |
| Timeline |
| Caledonia Mining |
| Galiano Gold |
Caledonia Mining and Galiano Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Galiano Gold
The main advantage of trading using opposite Caledonia Mining and Galiano Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Galiano Gold 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 Galiano Gold will offset losses from the drop in Galiano Gold's long position.| Caledonia Mining vs. DRDGOLD Limited ADR | Caledonia Mining vs. Galiano Gold | Caledonia Mining vs. Mastech Holdings | Caledonia Mining vs. EMX Royalty Corp |
| Galiano Gold vs. Avino Silver Gold | Galiano Gold vs. Americas Silver Corp | Galiano Gold vs. Paramount Gold Nevada | Galiano Gold vs. Fury Gold Mines |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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