Correlation Between Coeur Mining and Royal Gold
Can any of the company-specific risk be diversified away by investing in both Coeur Mining and Royal Gold 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 Royal Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coeur Mining and Royal Gold, you can compare the effects of market volatilities on Coeur Mining and Royal Gold 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 Royal Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur Mining and Royal Gold.
Diversification Opportunities for Coeur Mining and Royal Gold
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coeur and Royal is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and Royal Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Gold 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 Royal Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Gold has no effect on the direction of Coeur Mining i.e., Coeur Mining and Royal Gold go up and down completely randomly.
Pair Corralation between Coeur Mining and Royal Gold
Considering the 90-day investment horizon Coeur Mining is expected to generate 2.63 times more return on investment than Royal Gold. However, Coeur Mining is 2.63 times more volatile than Royal Gold. It trades about 0.1 of its potential returns per unit of risk. Royal Gold is currently generating about 0.06 per unit of risk. If you would invest 297.00 in Coeur Mining on August 24, 2024 and sell it today you would earn a total of 373.00 from holding Coeur Mining or generate 125.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coeur Mining vs. Royal Gold
Performance |
| Timeline |
| Coeur Mining |
| Royal Gold |
Coeur Mining and Royal Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coeur Mining and Royal Gold
The main advantage of trading using opposite Coeur Mining and Royal Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coeur Mining position performs unexpectedly, Royal Gold 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 Royal Gold will offset losses from the drop in Royal Gold's long position.| Coeur Mining vs. Gold Fields Ltd | Coeur Mining vs. Barrick Gold Corp | Coeur Mining vs. Pan American Silver | Coeur Mining vs. Franco Nevada |
| Royal Gold vs. Wheaton Precious Metals | Royal Gold vs. Agnico Eagle Mines | Royal Gold vs. Sandstorm Gold Ltd | Royal Gold vs. Osisko Gold Ro |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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