Correlation Between Coronado Global and Warrior Met
Can any of the company-specific risk be diversified away by investing in both Coronado Global and Warrior Met 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 Warrior Met 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 Warrior Met Coal, you can compare the effects of market volatilities on Coronado Global and Warrior Met 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 Warrior Met. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coronado Global and Warrior Met.
Diversification Opportunities for Coronado Global and Warrior Met
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coronado and Warrior is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Coronado Global Resources and Warrior Met Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warrior Met Coal 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 Warrior Met. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warrior Met Coal has no effect on the direction of Coronado Global i.e., Coronado Global and Warrior Met go up and down completely randomly.
Pair Corralation between Coronado Global and Warrior Met
Assuming the 90 days horizon Coronado Global Resources is expected to under-perform the Warrior Met. In addition to that, Coronado Global is 1.37 times more volatile than Warrior Met Coal. It trades about -0.07 of its total potential returns per unit of risk. Warrior Met Coal is currently generating about 0.0 per unit of volatility. If you would invest 5,903 in Warrior Met Coal on November 3, 2024 and sell it today you would lose (626.00) from holding Warrior Met Coal or give up 10.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Coronado Global Resources vs. Warrior Met Coal
Performance |
| Timeline |
| Coronado Global Resources |
| Warrior Met Coal |
Coronado Global and Warrior Met Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coronado Global and Warrior Met
The main advantage of trading using opposite Coronado Global and Warrior Met positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coronado Global position performs unexpectedly, Warrior Met 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 Warrior Met will offset losses from the drop in Warrior Met's 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 |
| Warrior Met vs. SunCoke Energy | Warrior Met vs. Alpha Metallurgical Resources | Warrior Met vs. American Resources Corp | Warrior Met vs. Ramaco Resources |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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