Correlation Between Henderson Land and Coeur Mining
Can any of the company-specific risk be diversified away by investing in both Henderson Land 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 Henderson Land and Coeur Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson Land Development and Coeur Mining, you can compare the effects of market volatilities on Henderson Land 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 Henderson Land with a short position of Coeur Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson Land and Coeur Mining.
Diversification Opportunities for Henderson Land and Coeur Mining
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Henderson and Coeur is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Land Development and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Henderson Land 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 Henderson Land Development 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 Henderson Land i.e., Henderson Land and Coeur Mining go up and down completely randomly.
Pair Corralation between Henderson Land and Coeur Mining
Assuming the 90 days horizon Henderson Land Development is expected to generate 3.87 times more return on investment than Coeur Mining. However, Henderson Land is 3.87 times more volatile than Coeur Mining. It trades about 0.09 of its potential returns per unit of risk. Coeur Mining is currently generating about -0.03 per unit of risk. If you would invest 112.00 in Henderson Land Development on November 3, 2024 and sell it today you would earn a total of 158.00 from holding Henderson Land Development or generate 141.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henderson Land Development vs. Coeur Mining
Performance |
| Timeline |
| Henderson Land Devel |
| Coeur Mining |
Henderson Land and Coeur Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson Land and Coeur Mining
The main advantage of trading using opposite Henderson Land and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson Land 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.| Henderson Land vs. Columbia Sportswear | Henderson Land vs. INTERCONT HOTELS | Henderson Land vs. PLAYWAY SA ZY 10 | Henderson Land vs. Gaming and Leisure |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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