Correlation Between Coeur Mining and B2Gold Corp
Can any of the company-specific risk be diversified away by investing in both Coeur Mining and B2Gold Corp 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 B2Gold Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coeur Mining and B2Gold Corp, you can compare the effects of market volatilities on Coeur Mining and B2Gold Corp 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 B2Gold Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur Mining and B2Gold Corp.
Diversification Opportunities for Coeur Mining and B2Gold Corp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coeur and B2Gold is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and B2Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B2Gold Corp 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 B2Gold Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B2Gold Corp has no effect on the direction of Coeur Mining i.e., Coeur Mining and B2Gold Corp go up and down completely randomly.
Pair Corralation between Coeur Mining and B2Gold Corp
Considering the 90-day investment horizon Coeur Mining is expected to generate 1.66 times more return on investment than B2Gold Corp. However, Coeur Mining is 1.66 times more volatile than B2Gold Corp. It trades about -0.06 of its potential returns per unit of risk. B2Gold Corp is currently generating about -0.3 per unit of risk. If you would invest 674.00 in Coeur Mining on August 28, 2024 and sell it today you would lose (44.00) from holding Coeur Mining or give up 6.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coeur Mining vs. B2Gold Corp
Performance |
| Timeline |
| Coeur Mining |
| B2Gold Corp |
Coeur Mining and B2Gold Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coeur Mining and B2Gold Corp
The main advantage of trading using opposite Coeur Mining and B2Gold Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coeur Mining position performs unexpectedly, B2Gold Corp 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 B2Gold Corp will offset losses from the drop in B2Gold Corp's long position.The idea behind Coeur Mining and B2Gold Corp 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.| B2Gold Corp vs. Sandstorm Gold Ltd | B2Gold Corp vs. Kinross Gold | B2Gold Corp vs. Alamos Gold | B2Gold Corp vs. Fortuna Silver Mines |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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