Correlation Between Cairn Homes and Coeur Mining
Can any of the company-specific risk be diversified away by investing in both Cairn Homes 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 Cairn Homes and Coeur Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairn Homes PLC and Coeur Mining, you can compare the effects of market volatilities on Cairn Homes 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 Cairn Homes with a short position of Coeur Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairn Homes and Coeur Mining.
Diversification Opportunities for Cairn Homes and Coeur Mining
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cairn and Coeur is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Cairn Homes 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 Cairn Homes PLC 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 Cairn Homes i.e., Cairn Homes and Coeur Mining go up and down completely randomly.
Pair Corralation between Cairn Homes and Coeur Mining
Assuming the 90 days trading horizon Cairn Homes PLC is expected to generate 0.43 times more return on investment than Coeur Mining. However, Cairn Homes PLC is 2.35 times less risky than Coeur Mining. It trades about -0.01 of its potential returns per unit of risk. Coeur Mining is currently generating about -0.21 per unit of risk. If you would invest 18,920 in Cairn Homes PLC on October 12, 2024 and sell it today you would lose (80.00) from holding Cairn Homes PLC or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Cairn Homes PLC vs. Coeur Mining
Performance |
| Timeline |
| Cairn Homes PLC |
| Coeur Mining |
Cairn Homes and Coeur Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairn Homes and Coeur Mining
The main advantage of trading using opposite Cairn Homes and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairn Homes 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.| Cairn Homes vs. HCA Healthcare | Cairn Homes vs. JB Hunt Transport | Cairn Homes vs. Omega Healthcare Investors | Cairn Homes vs. Coeur Mining |
| Coeur Mining vs. Cairn Homes PLC | Coeur Mining vs. Erste Group Bank | Coeur Mining vs. Ecclesiastical Insurance Office | Coeur Mining vs. Home Depot |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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