Correlation Between Now and Coronado Global
Can any of the company-specific risk be diversified away by investing in both Now and Coronado Global 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 Now and Coronado Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Now Inc and Coronado Global Resources, you can compare the effects of market volatilities on Now and Coronado Global 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 Now with a short position of Coronado Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Now and Coronado Global.
Diversification Opportunities for Now and Coronado Global
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Now and Coronado is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Now Inc and Coronado Global Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronado Global Resources and Now 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 Now Inc are associated (or correlated) with Coronado Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronado Global Resources has no effect on the direction of Now i.e., Now and Coronado Global go up and down completely randomly.
Pair Corralation between Now and Coronado Global
Given the investment horizon of 90 days Now Inc is expected to generate 1.08 times more return on investment than Coronado Global. However, Now is 1.08 times more volatile than Coronado Global Resources. It trades about 0.26 of its potential returns per unit of risk. Coronado Global Resources is currently generating about -0.16 per unit of risk. If you would invest 1,311 in Now Inc on November 4, 2024 and sell it today you would earn a total of 177.00 from holding Now Inc or generate 13.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Now Inc vs. Coronado Global Resources
Performance |
| Timeline |
| Now Inc |
| Coronado Global Resources |
Now and Coronado Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Now and Coronado Global
The main advantage of trading using opposite Now and Coronado Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Now position performs unexpectedly, Coronado Global 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 Coronado Global will offset losses from the drop in Coronado Global's long position.| Now vs. Oil States International | Now vs. Oceaneering International | Now vs. Geospace Technologies | Now vs. Enerflex |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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