Correlation Between Coeur Mining and JAPAN AIRLINES

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

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

Diversification Opportunities for Coeur Mining and JAPAN AIRLINES

0.26

Correlation Coefficient

Coeur Mining  JAPAN AIRLINES

Modest diversification

The 3 months correlation between Coeur and JAPAN is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and JAPAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN AIRLINES 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 JAPAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN AIRLINES has no effect on the direction of Coeur Mining i.e., Coeur Mining and JAPAN AIRLINES go up and down completely randomly.

Pair Corralation between Coeur Mining and JAPAN AIRLINES

Assuming the 90 days horizon Coeur Mining is expected to generate 1.19 times more return on investment than JAPAN AIRLINES. However, Coeur Mining is 1.19 times more volatile than JAPAN AIRLINES. It trades about -0.23 of its potential returns per unit of risk. JAPAN AIRLINES is currently generating about -0.32 per unit of risk. If you would invest  372.00  in Coeur Mining on October 4, 2024 and sell it today you would lose (16.00) from holding Coeur Mining or give up 4.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Coeur Mining  vs.  JAPAN AIRLINES

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

JAPAN AIRLINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JAPAN AIRLINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, JAPAN AIRLINES is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Coeur Mining and JAPAN AIRLINES

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

The idea behind Coeur Mining and JAPAN AIRLINES 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.