Correlation Between New Gold and Coeur Mining
Can any of the company-specific risk be diversified away by investing in both New Gold 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 New Gold and Coeur Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Gold and Coeur Mining, you can compare the effects of market volatilities on New Gold 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 New Gold with a short position of Coeur Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Gold and Coeur Mining.
Diversification Opportunities for New Gold and Coeur Mining
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between New and Coeur is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding New Gold and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and New Gold 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 New Gold 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 New Gold i.e., New Gold and Coeur Mining go up and down completely randomly.
Pair Corralation between New Gold and Coeur Mining
Considering the 90-day investment horizon New Gold is expected to generate 0.77 times more return on investment than Coeur Mining. However, New Gold is 1.29 times less risky than Coeur Mining. It trades about 0.08 of its potential returns per unit of risk. Coeur Mining is currently generating about 0.05 per unit of risk. If you would invest 213.00 in New Gold on September 1, 2024 and sell it today you would earn a total of 62.00 from holding New Gold or generate 29.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Gold vs. Coeur Mining
Performance |
| Timeline |
| New Gold |
| Coeur Mining |
New Gold and Coeur Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Gold and Coeur Mining
The main advantage of trading using opposite New Gold and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Gold 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.| New Gold vs. Eldorado Gold Corp | New Gold vs. Kinross Gold | New Gold vs. Harmony Gold Mining | New Gold vs. Coeur Mining |
| Coeur Mining vs. Equinox Gold Corp | Coeur Mining vs. B2Gold Corp | Coeur Mining vs. Sandstorm Gold Ltd | Coeur Mining vs. Pan American Silver |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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