Correlation Between Standard Chartered and Coeur Mining

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

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

Diversification Opportunities for Standard Chartered and Coeur Mining

-0.44

Correlation Coefficient

Standard Chartered  Coeur Mining

Very good diversification

The 3 months correlation between Standard and Coeur is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Standard Chartered PLC and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Standard Chartered 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 Standard Chartered PLC 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 Standard Chartered i.e., Standard Chartered and Coeur Mining go up and down completely randomly.

Pair Corralation between Standard Chartered and Coeur Mining

Assuming the 90 days trading horizon Standard Chartered is expected to generate 1.76 times less return on investment than Coeur Mining. But when comparing it to its historical volatility, Standard Chartered PLC is 4.82 times less risky than Coeur Mining. It trades about 0.3 of its potential returns per unit of risk. Coeur Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  607.00  in Coeur Mining on September 16, 2024 and sell it today you would earn a total of  51.00  from holding Coeur Mining or generate 8.4% return on investment over 90 days.

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

Standard Chartered PLC  vs.  Coeur Mining

Standard Chartered PLC

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Standard Chartered PLC are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Standard Chartered unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 comparatively stable basic indicators, Coeur Mining is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Standard Chartered and Coeur Mining

The main advantage of trading using opposite Standard Chartered and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Chartered 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 Standard Chartered PLC 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.

Check out your portfolio center.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.