Correlation Between Caledonia Mining and Mobilezone Holding

Can any of the company-specific risk be diversified away by investing in both Caledonia Mining and Mobilezone Holding 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 Caledonia Mining and Mobilezone Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Caledonia Mining and mobilezone holding AG, you can compare the effects of market volatilities on Caledonia Mining and Mobilezone Holding 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 Caledonia Mining with a short position of Mobilezone Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Mobilezone Holding.

Diversification Opportunities for Caledonia Mining and Mobilezone Holding

0.09

Correlation Coefficient

Caledonia Mining  Mobilezone Holding

Significant diversification

The 3 months correlation between Caledonia and Mobilezone is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and mobilezone holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mobilezone holding and Caledonia Mining 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 Caledonia Mining are associated (or correlated) with Mobilezone Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mobilezone holding has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Mobilezone Holding go up and down completely randomly.

Pair Corralation between Caledonia Mining and Mobilezone Holding

Assuming the 90 days trading horizon Caledonia Mining is expected to under-perform the Mobilezone Holding. In addition to that, Caledonia Mining is 3.19 times more volatile than mobilezone holding AG. It trades about -0.06 of its total potential returns per unit of risk. mobilezone holding AG is currently generating about 0.13 per unit of volatility. If you would invest  1,314  in mobilezone holding AG on September 5, 2024 and sell it today you would earn a total of  84.00  from holding mobilezone holding AG or generate 6.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Caledonia Mining  vs.  mobilezone holding AG

Caledonia Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Caledonia Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

mobilezone holding

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in mobilezone holding AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mobilezone Holding is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Caledonia Mining and Mobilezone Holding

The main advantage of trading using opposite Caledonia Mining and Mobilezone Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining position performs unexpectedly, Mobilezone Holding 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 Mobilezone Holding will offset losses from the drop in Mobilezone Holding's long position.

The idea behind Caledonia Mining and mobilezone holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.