Correlation Between Coronado Global and American Resources
Can any of the company-specific risk be diversified away by investing in both Coronado Global and American Resources 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 Coronado Global and American Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coronado Global Resources and American Resources Corp, you can compare the effects of market volatilities on Coronado Global and American Resources 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 Coronado Global with a short position of American Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coronado Global and American Resources.
Diversification Opportunities for Coronado Global and American Resources
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coronado and American is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Coronado Global Resources and American Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Resources Corp and Coronado Global 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 Coronado Global Resources are associated (or correlated) with American Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Resources Corp has no effect on the direction of Coronado Global i.e., Coronado Global and American Resources go up and down completely randomly.
Pair Corralation between Coronado Global and American Resources
Assuming the 90 days horizon Coronado Global Resources is expected to under-perform the American Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Coronado Global Resources is 1.57 times less risky than American Resources. The pink sheet trades about -0.07 of its potential returns per unit of risk. The American Resources Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. 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 |
Coronado Global Resources vs. American Resources Corp
Performance |
| Timeline |
| Coronado Global Resources |
| American Resources Corp |
Coronado Global and American Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coronado Global and American Resources
The main advantage of trading using opposite Coronado Global and American Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coronado Global position performs unexpectedly, American Resources 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 American Resources will offset losses from the drop in American Resources' long position.| Coronado Global vs. Colonial Coal International | Coronado Global vs. Alpha Metallurgical Resources | Coronado Global vs. Warrior Met Coal | Coronado Global vs. Ramaco Resources |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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