Correlation Between Warrior Met and Corsa Coal
Can any of the company-specific risk be diversified away by investing in both Warrior Met and Corsa Coal 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 Warrior Met and Corsa Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warrior Met Coal and Corsa Coal Corp, you can compare the effects of market volatilities on Warrior Met and Corsa Coal 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 Warrior Met with a short position of Corsa Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warrior Met and Corsa Coal.
Diversification Opportunities for Warrior Met and Corsa Coal
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Warrior and Corsa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Warrior Met Coal and Corsa Coal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsa Coal Corp and Warrior Met 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 Warrior Met Coal are associated (or correlated) with Corsa Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsa Coal Corp has no effect on the direction of Warrior Met i.e., Warrior Met and Corsa Coal go up and down completely randomly.
Pair Corralation between Warrior Met and Corsa Coal
Considering the 90-day investment horizon Warrior Met is expected to generate 1.2 times less return on investment than Corsa Coal. But when comparing it to its historical volatility, Warrior Met Coal is 2.24 times less risky than Corsa Coal. It trades about 0.07 of its potential returns per unit of risk. Corsa Coal Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Corsa Coal Corp on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Corsa Coal Corp or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Warrior Met Coal vs. Corsa Coal Corp
Performance |
| Timeline |
| Warrior Met Coal |
| Corsa Coal Corp |
Warrior Met and Corsa Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warrior Met and Corsa Coal
The main advantage of trading using opposite Warrior Met and Corsa Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warrior Met position performs unexpectedly, Corsa Coal 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 Corsa Coal will offset losses from the drop in Corsa Coal's long position.| Warrior Met vs. SunCoke Energy | Warrior Met vs. Arch Resources | Warrior Met vs. Alpha Metallurgical Resources | Warrior Met vs. American Resources Corp |
| Corsa Coal vs. Alpha Metallurgical Resources | Corsa Coal vs. Arch Resources | Corsa Coal vs. Warrior Met Coal | Corsa Coal 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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