Correlation Between Caledonia Mining and Timberline Resources
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Timberline 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 Timberline 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 Timberline Resources, you can compare the effects of market volatilities on Caledonia Mining and Timberline 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 Timberline Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Timberline Resources.
Diversification Opportunities for Caledonia Mining and Timberline Resources
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Caledonia and Timberline is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Timberline Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timberline 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 Timberline Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timberline Resources has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Timberline Resources go up and down completely randomly.
Pair Corralation between Caledonia Mining and Timberline Resources
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 | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Caledonia Mining vs. Timberline Resources
Performance |
| Timeline |
| Caledonia Mining |
| Timberline Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caledonia Mining and Timberline Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Timberline Resources
The main advantage of trading using opposite Caledonia Mining and Timberline Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Timberline 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 Timberline Resources will offset losses from the drop in Timberline 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 |
| Timberline Resources vs. Sokoman Minerals Corp | Timberline Resources vs. Irving Resources | Timberline Resources vs. Lion One Metals | Timberline Resources vs. Exploits Discovery 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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