Correlation Between IA FINANCIAL and Coeur Mining

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

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

Diversification Opportunities for IA FINANCIAL and Coeur Mining

-0.33

Correlation Coefficient

IA FINANCIAL  Coeur Mining

Very good diversification

The 3 months correlation between 1OD and Coeur is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding IA FINANCIAL P and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and IA FINANCIAL 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 IA FINANCIAL P 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 IA FINANCIAL i.e., IA FINANCIAL and Coeur Mining go up and down completely randomly.

Pair Corralation between IA FINANCIAL and Coeur Mining

Assuming the 90 days horizon IA FINANCIAL P is expected to under-perform the Coeur Mining. But the stock apears to be less risky and, when comparing its historical volatility, IA FINANCIAL P is 1.19 times less risky than Coeur Mining. The stock trades about -0.21 of its potential returns per unit of risk. The Coeur Mining is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  370.00  in Coeur Mining on September 24, 2024 and sell it today you would lose (16.00) from holding Coeur Mining or give up 4.32% of portfolio value over 90 days.

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

IA FINANCIAL P  vs.  Coeur Mining

IA FINANCIAL P

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IA FINANCIAL P are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, IA FINANCIAL reported 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. 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.

Pair Trading with IA FINANCIAL and Coeur Mining

The main advantage of trading using opposite IA FINANCIAL and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA FINANCIAL 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 IA FINANCIAL P 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.