Correlation Between Caledonia Mining and Gold Bull
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Gold Bull 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 Gold Bull into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Gold Bull Resources, you can compare the effects of market volatilities on Caledonia Mining and Gold Bull 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 Gold Bull. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Gold Bull.
Diversification Opportunities for Caledonia Mining and Gold Bull
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caledonia and Gold is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Gold Bull Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bull 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 Gold Bull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bull Resources has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Gold Bull go up and down completely randomly.
Pair Corralation between Caledonia Mining and Gold Bull
Given the investment horizon of 90 days Caledonia Mining is expected to under-perform the Gold Bull. But the stock apears to be less risky and, when comparing its historical volatility, Caledonia Mining is 2.32 times less risky than Gold Bull. The stock trades about 0.0 of its potential returns per unit of risk. The Gold Bull Resources is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Gold Bull Resources on September 2, 2024 and sell it today you would lose (15.00) from holding Gold Bull Resources or give up 42.86% 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. Gold Bull Resources
Performance |
| Timeline |
| Caledonia Mining |
| Gold Bull Resources |
Caledonia Mining and Gold Bull Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Gold Bull
The main advantage of trading using opposite Caledonia Mining and Gold Bull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Gold Bull 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 Gold Bull will offset losses from the drop in Gold Bull'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 |
| Gold Bull vs. Robex Resources | Gold Bull vs. Orefinders Resources | Gold Bull vs. Leviathan Gold | Gold Bull vs. Rover Metals Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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