Correlation Between Caledonia Mining and Abrdn Property

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

By analyzing existing cross correlation between Caledonia Mining and abrdn Property Income, you can compare the effects of market volatilities on Caledonia Mining and Abrdn Property 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 Abrdn Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Abrdn Property.

Diversification Opportunities for Caledonia Mining and Abrdn Property

-0.72

Correlation Coefficient

Caledonia Mining  Abrdn Property

Pay attention - limited upside

The 3 months correlation between Caledonia and Abrdn is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and abrdn Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Property Income 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 Abrdn Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Property Income has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Abrdn Property go up and down completely randomly.

Pair Corralation between Caledonia Mining and Abrdn Property

Assuming the 90 days trading horizon Caledonia Mining is expected to generate 0.98 times more return on investment than Abrdn Property. However, Caledonia Mining is 1.02 times less risky than Abrdn Property. It trades about 0.24 of its potential returns per unit of risk. abrdn Property Income is currently generating about -0.07 per unit of risk. If you would invest  107,094  in Caledonia Mining on April 21, 2025 and sell it today you would earn a total of  47,906  from holding Caledonia Mining or generate 44.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Caledonia Mining  vs.  abrdn Property Income

Caledonia Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caledonia Mining are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Caledonia Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

abrdn Property Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days abrdn Property Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Caledonia Mining and Abrdn Property

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

The idea behind Caledonia Mining and abrdn Property Income 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.