Correlation Between Oakley Capital and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Oakley Capital 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 Oakley Capital and Caledonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Caledonia Mining, you can compare the effects of market volatilities on Oakley Capital 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 Oakley Capital with a short position of Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Caledonia Mining.
Diversification Opportunities for Oakley Capital and Caledonia Mining
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oakley and Caledonia is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining and Oakley Capital 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 Oakley Capital Investments 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 Oakley Capital i.e., Oakley Capital and Caledonia Mining go up and down completely randomly.
Pair Corralation between Oakley Capital and Caledonia Mining
Assuming the 90 days trading horizon Oakley Capital Investments is expected to generate 0.21 times more return on investment than Caledonia Mining. However, Oakley Capital Investments is 4.76 times less risky than Caledonia Mining. It trades about -0.2 of its potential returns per unit of risk. Caledonia Mining is currently generating about -0.45 per unit of risk. If you would invest 50,000 in Oakley Capital Investments on August 25, 2024 and sell it today you would lose (1,400) from holding Oakley Capital Investments or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakley Capital Investments vs. Caledonia Mining
Performance |
| Timeline |
| Oakley Capital Inves |
| Caledonia Mining |
Oakley Capital and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Caledonia Mining
The main advantage of trading using opposite Oakley Capital and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital 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.| Oakley Capital vs. Beowulf Mining | Oakley Capital vs. Caledonia Mining | Oakley Capital vs. Eastinco Mining Exploration | Oakley Capital vs. Bloomsbury Publishing Plc |
| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Amaroq Minerals | Caledonia Mining vs. Central Asia Metals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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