Correlation Between Coeur Mining and Ring Energy

Can any of the company-specific risk be diversified away by investing in both Coeur Mining and Ring 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 Ring 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 Ring Energy, you can compare the effects of market volatilities on Coeur Mining and Ring 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 Ring Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur Mining and Ring Energy.

Diversification Opportunities for Coeur Mining and Ring Energy

0.4

Correlation Coefficient

Coeur Mining  Ring Energy

Very weak diversification

The 3 months correlation between Coeur and Ring is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and Ring Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ring 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 Ring Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ring Energy has no effect on the direction of Coeur Mining i.e., Coeur Mining and Ring Energy go up and down completely randomly.

Pair Corralation between Coeur Mining and Ring Energy

Assuming the 90 days horizon Coeur Mining is expected to generate 0.76 times more return on investment than Ring Energy. However, Coeur Mining is 1.32 times less risky than Ring Energy. It trades about -0.05 of its potential returns per unit of risk. Ring Energy is currently generating about -0.59 per unit of risk. If you would invest  360.00  in Coeur Mining on September 23, 2024 and sell it today you would lose (6.00) from holding Coeur Mining or give up 1.67% of portfolio value over 90 days.

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

Coeur Mining  vs.  Ring Energy

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.

Ring Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ring Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Coeur Mining and Ring Energy

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

The idea behind Coeur Mining and Ring 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.