Correlation Between Coeur Mining and CVR Energy

Can any of the company-specific risk be diversified away by investing in both Coeur Mining and CVR Energy 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 Coeur Mining and CVR Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coeur Mining and CVR Energy, you can compare the effects of market volatilities on Coeur Mining and CVR Energy 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 Coeur Mining with a short position of CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur Mining and CVR Energy.

Diversification Opportunities for Coeur Mining and CVR Energy

0.08

Correlation Coefficient

Coeur Mining  CVR Energy

Significant diversification

The 3 months correlation between Coeur and CVR is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and Coeur Mining 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 Coeur Mining are associated (or correlated) with CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of Coeur Mining i.e., Coeur Mining and CVR Energy go up and down completely randomly.

Pair Corralation between Coeur Mining and CVR Energy

Assuming the 90 days trading horizon Coeur Mining is expected to generate 2.09 times less return on investment than CVR Energy. In addition to that, Coeur Mining is 1.38 times more volatile than CVR Energy. It trades about 0.04 of its total potential returns per unit of risk. CVR Energy is currently generating about 0.12 per unit of volatility. If you would invest  1,779  in CVR Energy on December 22, 2024 and sell it today you would earn a total of  362.00  from holding CVR Energy or generate 20.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Coeur Mining  vs.  CVR Energy

Coeur Mining

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coeur Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Coeur Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CVR Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CVR Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CVR Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coeur Mining and CVR Energy

The main advantage of trading using opposite Coeur Mining and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coeur Mining position performs unexpectedly, CVR Energy 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 CVR Energy will offset losses from the drop in CVR Energy's long position.

The idea behind Coeur Mining and CVR Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.