Correlation Between Retail Estates and Coeur Mining

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

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

Diversification Opportunities for Retail Estates and Coeur Mining

0.46

Correlation Coefficient

Retail Estates  Coeur Mining

Very weak diversification

The 3 months correlation between Retail and Coeur is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Retail Estates 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 Retail Estates NV 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 Retail Estates i.e., Retail Estates and Coeur Mining go up and down completely randomly.

Pair Corralation between Retail Estates and Coeur Mining

Assuming the 90 days horizon Retail Estates NV is expected to generate 0.85 times more return on investment than Coeur Mining. However, Retail Estates NV is 1.18 times less risky than Coeur Mining. It trades about -0.09 of its potential returns per unit of risk. Coeur Mining is currently generating about -0.09 per unit of risk. If you would invest  5,890  in Retail Estates NV on September 28, 2024 and sell it today you would lose (110.00) from holding Retail Estates NV or give up 1.87% of portfolio value over 90 days.

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

Retail Estates NV  vs.  Coeur Mining

Retail Estates NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Retail Estates NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Retail Estates and Coeur Mining

The main advantage of trading using opposite Retail Estates and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates 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 Retail Estates NV 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.