Correlation Between Coeur Mining and Universal Health

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

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

Diversification Opportunities for Coeur Mining and Universal Health

0.32

Correlation Coefficient

Coeur Mining  Universal Health

Weak diversification

The 3 months correlation between Coeur and Universal is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and Universal Health Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Realty 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 Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Realty has no effect on the direction of Coeur Mining i.e., Coeur Mining and Universal Health go up and down completely randomly.

Pair Corralation between Coeur Mining and Universal Health

Assuming the 90 days horizon Coeur Mining is expected to under-perform the Universal Health. But the stock apears to be less risky and, when comparing its historical volatility, Coeur Mining is 1.57 times less risky than Universal Health. The stock trades about -0.03 of its potential returns per unit of risk. The Universal Health Realty is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,766  in Universal Health Realty on December 4, 2024 and sell it today you would earn a total of  51.00  from holding Universal Health Realty or generate 1.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Coeur Mining  vs.  Universal Health Realty

Coeur Mining

Risk-Adjusted Performance

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.

Universal Health Realty

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Health Realty are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Universal Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Coeur Mining and Universal Health

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

The idea behind Coeur Mining and Universal Health Realty 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.