Correlation Between China Resources and Coeur Mining
Can any of the company-specific risk be diversified away by investing in both China Resources and Coeur Mining 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 China Resources and Coeur Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Resources Beer and Coeur Mining, you can compare the effects of market volatilities on China Resources and Coeur Mining 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 China Resources with a short position of Coeur Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Coeur Mining.
Diversification Opportunities for China Resources and Coeur Mining
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Coeur is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and China 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 China Resources Beer are associated (or correlated) with Coeur Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coeur Mining has no effect on the direction of China Resources i.e., China Resources and Coeur Mining go up and down completely randomly.
Pair Corralation between China Resources and Coeur Mining
Assuming the 90 days horizon China Resources Beer is expected to generate 4.52 times more return on investment than Coeur Mining. However, China Resources is 4.52 times more volatile than Coeur Mining. It trades about 0.0 of its potential returns per unit of risk. Coeur Mining is currently generating about -0.04 per unit of risk. If you would invest 296.00 in China Resources Beer on November 3, 2024 and sell it today you would lose (2.00) from holding China Resources Beer or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. Coeur Mining
Performance |
| Timeline |
| China Resources Beer |
| Coeur Mining |
China Resources and Coeur Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Coeur Mining
The main advantage of trading using opposite China Resources and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Coeur Mining 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 Coeur Mining will offset losses from the drop in Coeur Mining's long position.| China Resources vs. Singapore Reinsurance | China Resources vs. Japan Post Insurance | China Resources vs. Ryanair Holdings plc | China Resources vs. Delta Air Lines |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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