Correlation Between United States and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Caledonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Caledonia Mining, you can compare the effects of market volatilities on United States 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 United States with a short position of Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Caledonia Mining.
Diversification Opportunities for United States and Caledonia Mining
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Caledonia is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining and United States 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 United States Steel 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 United States i.e., United States and Caledonia Mining go up and down completely randomly.
Pair Corralation between United States and Caledonia Mining
Taking into account the 90-day investment horizon United States Steel is expected to generate 1.15 times more return on investment than Caledonia Mining. However, United States is 1.15 times more volatile than Caledonia Mining. It trades about 0.05 of its potential returns per unit of risk. Caledonia Mining is currently generating about 0.0 per unit of risk. If you would invest 2,441 in United States Steel on November 8, 2024 and sell it today you would earn a total of 1,486 from holding United States Steel or generate 60.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Caledonia Mining
Performance |
| Timeline |
| United States Steel |
| Caledonia Mining |
United States and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Caledonia Mining
The main advantage of trading using opposite United States and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |