Correlation Between Coeur Mining and NioCorp Developments

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

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

Diversification Opportunities for Coeur Mining and NioCorp Developments

0.55

Correlation Coefficient

Coeur Mining  NioCorp Developments

Very weak diversification

The 3 months correlation between Coeur and NioCorp is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments 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 NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of Coeur Mining i.e., Coeur Mining and NioCorp Developments go up and down completely randomly.

Pair Corralation between Coeur Mining and NioCorp Developments

Considering the 90-day investment horizon Coeur Mining is expected to generate 2.27 times less return on investment than NioCorp Developments. In addition to that, Coeur Mining is 1.11 times more volatile than NioCorp Developments Ltd. It trades about 0.1 of its total potential returns per unit of risk. NioCorp Developments Ltd is currently generating about 0.26 per unit of volatility. If you would invest  141.00  in NioCorp Developments Ltd on October 23, 2024 and sell it today you would earn a total of  21.00  from holding NioCorp Developments Ltd or generate 14.89% return on investment over 90 days.

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

Coeur Mining  vs.  NioCorp Developments Ltd

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. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

NioCorp Developments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NioCorp Developments Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, NioCorp Developments is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Coeur Mining and NioCorp Developments

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

The idea behind Coeur Mining and NioCorp Developments Ltd 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.