Correlation Between Coeur Mining and British American
Can any of the company-specific risk be diversified away by investing in both Coeur Mining and British American 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 Coeur Mining and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coeur Mining and British American Tobacco, you can compare the effects of market volatilities on Coeur Mining and British American 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 Coeur Mining with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur Mining and British American.
Diversification Opportunities for Coeur Mining and British American
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coeur and British is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and Coeur 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 Coeur Mining are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Coeur Mining i.e., Coeur Mining and British American go up and down completely randomly.
Pair Corralation between Coeur Mining and British American
Assuming the 90 days trading horizon Coeur Mining is expected to generate 6.21 times more return on investment than British American. However, Coeur Mining is 6.21 times more volatile than British American Tobacco. It trades about 0.11 of its potential returns per unit of risk. British American Tobacco is currently generating about 0.65 per unit of risk. If you would invest 616.00 in Coeur Mining on September 2, 2024 and sell it today you would earn a total of 47.00 from holding Coeur Mining or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coeur Mining vs. British American Tobacco
Performance |
| Timeline |
| Coeur Mining |
| British American Tobacco |
Coeur Mining and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coeur Mining and British American
The main advantage of trading using opposite Coeur Mining and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coeur Mining position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| Coeur Mining vs. Uniper SE | Coeur Mining vs. Mulberry Group PLC | Coeur Mining vs. London Security Plc | Coeur Mining vs. Triad Group PLC |
| British American vs. Uniper SE | British American vs. Mulberry Group PLC | British American vs. London Security Plc | British American vs. Triad Group PLC |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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