Correlation Between Sun Hung and Coeur Mining

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

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

Diversification Opportunities for Sun Hung and Coeur Mining

-0.27

Correlation Coefficient

Sun Hung  Coeur Mining

Very good diversification

The 3 months correlation between Sun and Coeur is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sun Hung Kai and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Sun Hung 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 Sun Hung Kai 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 Sun Hung i.e., Sun Hung and Coeur Mining go up and down completely randomly.

Pair Corralation between Sun Hung and Coeur Mining

Assuming the 90 days horizon Sun Hung Kai is expected to under-perform the Coeur Mining. In addition to that, Sun Hung is 1.07 times more volatile than Coeur Mining. It trades about -0.14 of its total potential returns per unit of risk. Coeur Mining is currently generating about -0.05 per unit of volatility. If you would invest  360.00  in Coeur Mining on September 23, 2024 and sell it today you would lose (6.00) from holding Coeur Mining or give up 1.67% of portfolio value over 90 days.

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

Sun Hung Kai  vs.  Coeur Mining

Sun Hung Kai

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Hung Kai are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sun Hung 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 Sun Hung and Coeur Mining

The main advantage of trading using opposite Sun Hung and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Hung 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 Sun Hung Kai 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.