Correlation Between Tudor Gold and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Tudor 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 Tudor 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 Tudor Gold Corp and Caledonia Mining, you can compare the effects of market volatilities on Tudor 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 Tudor Gold with a short position of Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tudor Gold and Caledonia Mining.
Diversification Opportunities for Tudor Gold and Caledonia Mining
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tudor and Caledonia is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tudor Gold Corp and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining and Tudor 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 Tudor Gold 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 Tudor Gold i.e., Tudor Gold and Caledonia Mining go up and down completely randomly.
Pair Corralation between Tudor Gold and Caledonia Mining
Assuming the 90 days horizon Tudor Gold Corp is expected to generate 1.1 times more return on investment than Caledonia Mining. However, Tudor Gold is 1.1 times more volatile than Caledonia Mining. It trades about -0.25 of its potential returns per unit of risk. Caledonia Mining is currently generating about -0.46 per unit of risk. If you would invest 73.00 in Tudor Gold Corp on August 29, 2024 and sell it today you would lose (16.00) from holding Tudor Gold Corp or give up 21.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tudor Gold Corp vs. Caledonia Mining
Performance |
| Timeline |
| Tudor Gold Corp |
| Caledonia Mining |
Tudor Gold and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tudor Gold and Caledonia Mining
The main advantage of trading using opposite Tudor Gold and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tudor 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.| Tudor Gold vs. Fremont Gold | Tudor Gold vs. Norsemont Mining | Tudor Gold vs. Hummingbird Resources PLC | Tudor Gold vs. Rio2 Limited |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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