Correlation Between Panther Metals and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Panther Metals 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 Panther Metals and Caledonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panther Metals PLC and Caledonia Mining, you can compare the effects of market volatilities on Panther Metals 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 Panther Metals with a short position of Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panther Metals and Caledonia Mining.
Diversification Opportunities for Panther Metals and Caledonia Mining
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Panther and Caledonia is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Panther Metals PLC and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining and Panther Metals 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 Panther Metals PLC 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 Panther Metals i.e., Panther Metals and Caledonia Mining go up and down completely randomly.
Pair Corralation between Panther Metals and Caledonia Mining
Assuming the 90 days trading horizon Panther Metals PLC is expected to under-perform the Caledonia Mining. In addition to that, Panther Metals is 1.66 times more volatile than Caledonia Mining. It trades about -0.51 of its total potential returns per unit of risk. Caledonia Mining is currently generating about -0.27 per unit of volatility. If you would invest 88,500 in Caledonia Mining on September 22, 2024 and sell it today you would lose (10,500) from holding Caledonia Mining or give up 11.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panther Metals PLC vs. Caledonia Mining
Performance |
| Timeline |
| Panther Metals PLC |
| Caledonia Mining |
Panther Metals and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panther Metals and Caledonia Mining
The main advantage of trading using opposite Panther Metals and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panther Metals 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.| Panther Metals vs. Givaudan SA | Panther Metals vs. Antofagasta PLC | Panther Metals vs. Ferrexpo PLC | Panther Metals vs. Atalaya Mining |
| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Ferrexpo PLC | Caledonia Mining vs. Atalaya Mining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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