Correlation Between Coeur Mining and InterContinental

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

By analyzing existing cross correlation between Coeur Mining and InterContinental Hotels Group, you can compare the effects of market volatilities on Coeur Mining and InterContinental 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 InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur Mining and InterContinental.

Diversification Opportunities for Coeur Mining and InterContinental

0.05

Correlation Coefficient

Coeur Mining  InterContinental

Significant diversification

The 3 months correlation between Coeur and InterContinental is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels 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 InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Coeur Mining i.e., Coeur Mining and InterContinental go up and down completely randomly.

Pair Corralation between Coeur Mining and InterContinental

Assuming the 90 days horizon Coeur Mining is expected to under-perform the InterContinental. But the stock apears to be less risky and, when comparing its historical volatility, Coeur Mining is 1.29 times less risky than InterContinental. The stock trades about -0.06 of its potential returns per unit of risk. The InterContinental Hotels Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  9,950  in InterContinental Hotels Group on October 6, 2024 and sell it today you would earn a total of  2,150  from holding InterContinental Hotels Group or generate 21.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Coeur Mining  vs.  InterContinental Hotels Group

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. Despite nearly stable basic indicators, Coeur Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

InterContinental Hotels

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in InterContinental Hotels Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, InterContinental reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coeur Mining and InterContinental

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

The idea behind Coeur Mining and InterContinental Hotels Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.