Correlation Between Caledonia Mining and Seraphim Space

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

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

Diversification Opportunities for Caledonia Mining and Seraphim Space

0.95

Correlation Coefficient

Caledonia Mining  Seraphim Space

Almost no diversification

The 3 months correlation between Caledonia and Seraphim is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Seraphim Space Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seraphim Space Investment 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 Seraphim Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seraphim Space Investment has no effect on the direction of Caledonia Mining i.e., Caledonia Mining and Seraphim Space go up and down completely randomly.

Pair Corralation between Caledonia Mining and Seraphim Space

Assuming the 90 days trading horizon Caledonia Mining is expected to generate 1.18 times less return on investment than Seraphim Space. But when comparing it to its historical volatility, Caledonia Mining is 1.09 times less risky than Seraphim Space. It trades about 0.24 of its potential returns per unit of risk. Seraphim Space Investment is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  5,180  in Seraphim Space Investment on April 20, 2025 and sell it today you would earn a total of  2,840  from holding Seraphim Space Investment or generate 54.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Caledonia Mining  vs.  Seraphim Space Investment

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.

Seraphim Space Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Seraphim Space Investment are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Seraphim Space unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Caledonia Mining and Seraphim Space

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

The idea behind Caledonia Mining and Seraphim Space Investment 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.