Correlation Between Coty and Coeur Mining
Can any of the company-specific risk be diversified away by investing in both Coty 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 Coty and Coeur Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coty Inc and Coeur Mining, you can compare the effects of market volatilities on Coty 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 Coty with a short position of Coeur Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coty and Coeur Mining.
Diversification Opportunities for Coty and Coeur Mining
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coty and Coeur is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Coty 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 Coty Inc 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 Coty i.e., Coty and Coeur Mining go up and down completely randomly.
Pair Corralation between Coty and Coeur Mining
Given the investment horizon of 90 days Coty is expected to generate 1.02 times less return on investment than Coeur Mining. But when comparing it to its historical volatility, Coty Inc is 1.8 times less risky than Coeur Mining. It trades about 0.18 of its potential returns per unit of risk. Coeur Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 620.00 in Coeur Mining on November 3, 2024 and sell it today you would earn a total of 40.00 from holding Coeur Mining or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Coty Inc vs. Coeur Mining
Performance |
| Timeline |
| Coty Inc |
| Coeur Mining |
Coty and Coeur Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coty and Coeur Mining
The main advantage of trading using opposite Coty and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coty 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.The idea behind Coty Inc and Coeur Mining 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.| Coeur Mining vs. Equinox Gold Corp | Coeur Mining vs. B2Gold Corp | Coeur Mining vs. Sandstorm Gold Ltd | Coeur Mining vs. Pan American Silver |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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