Correlation Between Aberdeen Diversified and Coeur Mining

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

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

Diversification Opportunities for Aberdeen Diversified and Coeur Mining

-0.22

Correlation Coefficient

Aberdeen Diversified  Coeur Mining

Very good diversification

The 3 months correlation between Aberdeen and Coeur is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Diversified Income and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Aberdeen Diversified 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 Aberdeen Diversified Income 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 Aberdeen Diversified i.e., Aberdeen Diversified and Coeur Mining go up and down completely randomly.

Pair Corralation between Aberdeen Diversified and Coeur Mining

Assuming the 90 days trading horizon Aberdeen Diversified Income is expected to generate 0.32 times more return on investment than Coeur Mining. However, Aberdeen Diversified Income is 3.1 times less risky than Coeur Mining. It trades about 0.14 of its potential returns per unit of risk. Coeur Mining is currently generating about 0.04 per unit of risk. If you would invest  4,340  in Aberdeen Diversified Income on December 24, 2024 and sell it today you would earn a total of  490.00  from holding Aberdeen Diversified Income or generate 11.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Aberdeen Diversified Income  vs.  Coeur Mining

Aberdeen Diversified

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Diversified Income are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aberdeen Diversified may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 uncertain basic indicators, Coeur Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aberdeen Diversified and Coeur Mining

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

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.