Correlation Between Coeur Mining and Japan Tobacco
Can any of the company-specific risk be diversified away by investing in both Coeur Mining and Japan Tobacco 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 Japan Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coeur Mining and Japan Tobacco, you can compare the effects of market volatilities on Coeur Mining and Japan Tobacco 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 Japan Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur Mining and Japan Tobacco.
Diversification Opportunities for Coeur Mining and Japan Tobacco
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coeur and Japan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and Japan Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan 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 Japan Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Tobacco has no effect on the direction of Coeur Mining i.e., Coeur Mining and Japan Tobacco go up and down completely randomly.
Pair Corralation between Coeur Mining and Japan Tobacco
Assuming the 90 days horizon Coeur Mining is expected to under-perform the Japan Tobacco. But the stock apears to be less risky and, when comparing its historical volatility, Coeur Mining is 1.2 times less risky than Japan Tobacco. The stock trades about -0.05 of its potential returns per unit of risk. The Japan Tobacco is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,926 in Japan Tobacco on September 3, 2024 and sell it today you would earn a total of 710.00 from holding Japan Tobacco or generate 36.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coeur Mining vs. Japan Tobacco
Performance |
| Timeline |
| Coeur Mining |
| Japan Tobacco |
Coeur Mining and Japan Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coeur Mining and Japan Tobacco
The main advantage of trading using opposite Coeur Mining and Japan Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coeur Mining position performs unexpectedly, Japan Tobacco 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 Japan Tobacco will offset losses from the drop in Japan Tobacco's long position.| Coeur Mining vs. TITANIUM TRANSPORTGROUP | Coeur Mining vs. NTG Nordic Transport | Coeur Mining vs. LGI Homes | Coeur Mining vs. Haier Smart Home |
| Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. JAPAN TOBACCO UNSPADR12 | Japan Tobacco vs. Imperial Brands 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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