Correlation Between Amazon and Coeur Mining

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

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

Diversification Opportunities for Amazon and Coeur Mining

-0.4

Correlation Coefficient

Amazon  Coeur Mining

Very good diversification

The 3 months correlation between Amazon and Coeur is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Amazon 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 Amazon Inc 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 Amazon i.e., Amazon and Coeur Mining go up and down completely randomly.

Pair Corralation between Amazon and Coeur Mining

Assuming the 90 days trading horizon Amazon Inc is expected to generate 0.63 times more return on investment than Coeur Mining. However, Amazon Inc is 1.58 times less risky than Coeur Mining. It trades about 0.11 of its potential returns per unit of risk. Coeur Mining is currently generating about -0.06 per unit of risk. If you would invest  19,000  in Amazon Inc on October 22, 2024 and sell it today you would earn a total of  2,800  from holding Amazon Inc or generate 14.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Amazon Inc  vs.  Coeur Mining

Amazon Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Amazon unveiled solid returns over the last few months and may actually be approaching a breakup point.

Coeur Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coeur Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Amazon and Coeur Mining

The main advantage of trading using opposite Amazon and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon 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.

The idea behind Amazon Inc and Coeur Mining 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.