Correlation Between EMX Royalty and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both EMX Royalty and Caledonia Mining 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 EMX Royalty and Caledonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMX Royalty Corp and Caledonia Mining, you can compare the effects of market volatilities on EMX Royalty and Caledonia Mining 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 EMX Royalty with a short position of Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMX Royalty and Caledonia Mining.
Diversification Opportunities for EMX Royalty and Caledonia Mining
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMX and Caledonia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding EMX Royalty Corp and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining and EMX Royalty 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 EMX Royalty Corp are associated (or correlated) with Caledonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Mining has no effect on the direction of EMX Royalty i.e., EMX Royalty and Caledonia Mining go up and down completely randomly.
Pair Corralation between EMX Royalty and Caledonia Mining
Considering the 90-day investment horizon EMX Royalty Corp is expected to generate 0.84 times more return on investment than Caledonia Mining. However, EMX Royalty Corp is 1.19 times less risky than Caledonia Mining. It trades about 0.01 of its potential returns per unit of risk. Caledonia Mining is currently generating about 0.01 per unit of risk. If you would invest 175.00 in EMX Royalty Corp on August 26, 2024 and sell it today you would earn a total of 0.00 from holding EMX Royalty Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMX Royalty Corp vs. Caledonia Mining
Performance |
| Timeline |
| EMX Royalty Corp |
| Caledonia Mining |
EMX Royalty and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMX Royalty and Caledonia Mining
The main advantage of trading using opposite EMX Royalty and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMX Royalty position performs unexpectedly, Caledonia Mining 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 Caledonia Mining will offset losses from the drop in Caledonia Mining's long position.| EMX Royalty vs. Metalla Royalty Streaming | EMX Royalty vs. Osisko Gold Ro | EMX Royalty vs. Equinox Gold Corp | EMX Royalty vs. SilverCrest Metals |
| Caledonia Mining vs. DRDGOLD Limited ADR | Caledonia Mining vs. Galiano Gold | Caledonia Mining vs. Mastech Holdings | Caledonia Mining vs. EMX Royalty 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 Stocks Directory module to find actively traded stocks across global markets.
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