Correlation Between Galiano Gold and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Galiano Gold 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 Galiano Gold and Caledonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galiano Gold and Caledonia Mining, you can compare the effects of market volatilities on Galiano Gold 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 Galiano Gold with a short position of Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galiano Gold and Caledonia Mining.
Diversification Opportunities for Galiano Gold and Caledonia Mining
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Galiano and Caledonia is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Galiano Gold and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining and Galiano Gold 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 Galiano Gold 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 Galiano Gold i.e., Galiano Gold and Caledonia Mining go up and down completely randomly.
Pair Corralation between Galiano Gold and Caledonia Mining
Considering the 90-day investment horizon Galiano Gold is expected to generate 1.43 times more return on investment than Caledonia Mining. However, Galiano Gold is 1.43 times more volatile than Caledonia Mining. It trades about 0.1 of its potential returns per unit of risk. Caledonia Mining is currently generating about 0.01 per unit of risk. If you would invest 65.00 in Galiano Gold on August 26, 2024 and sell it today you would earn a total of 84.00 from holding Galiano Gold or generate 129.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galiano Gold vs. Caledonia Mining
Performance |
| Timeline |
| Galiano Gold |
| Caledonia Mining |
Galiano Gold and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galiano Gold and Caledonia Mining
The main advantage of trading using opposite Galiano Gold and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galiano Gold 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.| Galiano Gold vs. Avino Silver Gold | Galiano Gold vs. Americas Silver Corp | Galiano Gold vs. Paramount Gold Nevada | Galiano Gold vs. Fury Gold Mines |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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