Correlation Between Energy Resources and Coronado Global
Can any of the company-specific risk be diversified away by investing in both Energy Resources 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 Energy Resources and Coronado Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Resources and Coronado Global Resources, you can compare the effects of market volatilities on Energy Resources 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 Energy Resources with a short position of Coronado Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Resources and Coronado Global.
Diversification Opportunities for Energy Resources and Coronado Global
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Energy and Coronado is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Energy Resources 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 Energy Resources 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 Energy Resources 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 Energy Resources i.e., Energy Resources and Coronado Global go up and down completely randomly.
Pair Corralation between Energy Resources and Coronado Global
Assuming the 90 days trading horizon Energy Resources is expected to generate 11.78 times more return on investment than Coronado Global. However, Energy Resources is 11.78 times more volatile than Coronado Global Resources. It trades about 0.19 of its potential returns per unit of risk. Coronado Global Resources is currently generating about -0.21 per unit of risk. If you would invest 0.20 in Energy Resources on August 29, 2024 and sell it today you would earn a total of 0.10 from holding Energy Resources or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Resources vs. Coronado Global Resources
Performance |
| Timeline |
| Energy Resources |
| Coronado Global Resources |
Energy Resources and Coronado Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Resources and Coronado Global
The main advantage of trading using opposite Energy Resources and Coronado Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Resources 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.| Energy Resources vs. Data3 | Energy Resources vs. Mayfield Childcare | Energy Resources vs. Toys R Us | Energy Resources vs. Super Retail Group |
| Coronado Global vs. M3 Mining | Coronado Global vs. Metro Mining | Coronado Global vs. National Storage REIT | Coronado Global vs. ABACUS STORAGE KING |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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