Correlation Between Pan American and Coeur Mining
Can any of the company-specific risk be diversified away by investing in both Pan American 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 Pan American and Coeur Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan American Silver and Coeur Mining, you can compare the effects of market volatilities on Pan American 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 Pan American with a short position of Coeur Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan American and Coeur Mining.
Diversification Opportunities for Pan American and Coeur Mining
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pan and Coeur is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pan American Silver and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Pan American 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 Pan American Silver 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 Pan American i.e., Pan American and Coeur Mining go up and down completely randomly.
Pair Corralation between Pan American and Coeur Mining
Given the investment horizon of 90 days Pan American Silver is expected to under-perform the Coeur Mining. But the stock apears to be less risky and, when comparing its historical volatility, Pan American Silver is 1.51 times less risky than Coeur Mining. The stock trades about -0.17 of its potential returns per unit of risk. The Coeur Mining is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 730.00 in Coeur Mining on August 24, 2024 and sell it today you would lose (60.00) from holding Coeur Mining or give up 8.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan American Silver vs. Coeur Mining
Performance |
| Timeline |
| Pan American Silver |
| Coeur Mining |
Pan American and Coeur Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan American and Coeur Mining
The main advantage of trading using opposite Pan American and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan American 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.| Pan American vs. Newmont Goldcorp Corp | Pan American vs. Wheaton Precious Metals | Pan American vs. Franco Nevada | Pan American vs. Kinross Gold |
| Coeur Mining vs. Gold Fields Ltd | Coeur Mining vs. Barrick Gold Corp | Coeur Mining vs. Pan American Silver | Coeur Mining vs. Franco Nevada |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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