Correlation Between American Resources and Coronado Global
Can any of the company-specific risk be diversified away by investing in both American Resources and Coronado Global 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 American Resources and Coronado Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Resources Corp and Coronado Global Resources, you can compare the effects of market volatilities on American Resources and Coronado Global 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 American Resources with a short position of Coronado Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Resources and Coronado Global.
Diversification Opportunities for American Resources and Coronado Global
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Coronado is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding American Resources Corp and Coronado Global Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronado Global Resources and American Resources 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 American Resources Corp are associated (or correlated) with Coronado Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronado Global Resources has no effect on the direction of American Resources i.e., American Resources and Coronado Global go up and down completely randomly.
Pair Corralation between American Resources and Coronado Global
Given the investment horizon of 90 days American Resources Corp is expected to generate 1.57 times more return on investment than Coronado Global. However, American Resources is 1.57 times more volatile than Coronado Global Resources. It trades about -0.01 of its potential returns per unit of risk. Coronado Global Resources is currently generating about -0.07 per unit of risk. If you would invest 131.00 in American Resources Corp on November 3, 2024 and sell it today you would lose (66.50) from holding American Resources Corp or give up 50.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.8% |
| Values | Daily Returns |
American Resources Corp vs. Coronado Global Resources
Performance |
| Timeline |
| American Resources Corp |
| Coronado Global Resources |
American Resources and Coronado Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Resources and Coronado Global
The main advantage of trading using opposite American Resources and Coronado Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Resources position performs unexpectedly, Coronado Global 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 Coronado Global will offset losses from the drop in Coronado Global's long position.| American Resources vs. Westwater Resources | American Resources vs. Aqua Metals | American Resources vs. Pioneer Power Solutions | American Resources vs. Hall of Fame |
| Coronado Global vs. Colonial Coal International | Coronado Global vs. Alpha Metallurgical Resources | Coronado Global vs. Warrior Met Coal | Coronado Global vs. Ramaco Resources |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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