Correlation Between EVRAZ Plc and Caledonia Mining

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

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

Diversification Opportunities for EVRAZ Plc and Caledonia Mining

0.0

Correlation Coefficient

EVRAZ Plc  Caledonia Mining

Pay attention - limited upside

The 3 months correlation between EVRAZ and Caledonia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EVRAZ plc and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining and EVRAZ Plc 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 EVRAZ plc 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 EVRAZ Plc i.e., EVRAZ Plc and Caledonia Mining go up and down completely randomly.

Pair Corralation between EVRAZ Plc and Caledonia Mining

If you would invest  107,094  in Caledonia Mining on April 20, 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	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EVRAZ plc  vs.  Caledonia Mining

EVRAZ plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days EVRAZ plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, EVRAZ Plc is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with EVRAZ Plc and Caledonia Mining

The main advantage of trading using opposite EVRAZ Plc and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVRAZ Plc 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.

The idea behind EVRAZ plc and Caledonia Mining 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.