Correlation Between JNC Resources and Coeur Mining

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

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

Diversification Opportunities for JNC Resources and Coeur Mining

0.21

Correlation Coefficient

JNC Resources  Coeur Mining

Modest diversification

The 3 months correlation between JNC and Coeur is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding JNC Resources and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and JNC Resources 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 JNC Resources are associated (or correlated) with Coeur Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coeur Mining has no effect on the direction of JNC Resources i.e., JNC Resources and Coeur Mining go up and down completely randomly.

Pair Corralation between JNC Resources and Coeur Mining

Assuming the 90 days horizon JNC Resources is expected to generate 11.08 times more return on investment than Coeur Mining. However, JNC Resources is 11.08 times more volatile than Coeur Mining. It trades about 0.1 of its potential returns per unit of risk. Coeur Mining is currently generating about 0.04 per unit of risk. If you would invest  2.80  in JNC Resources on October 11, 2024 and sell it today you would lose (1.00) from holding JNC Resources or give up 35.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

JNC Resources  vs.  Coeur Mining

JNC Resources

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JNC Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, JNC Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Coeur Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coeur Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Coeur Mining is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JNC Resources and Coeur Mining

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

The idea behind JNC Resources and Coeur Mining 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.