Correlation Between AngloGold Ashanti and Coeur Mining

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

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

Diversification Opportunities for AngloGold Ashanti and Coeur Mining

0.87

Correlation Coefficient

AngloGold Ashanti  Coeur Mining

Very poor diversification

The 3 months correlation between AngloGold and Coeur is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti plc and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and AngloGold Ashanti 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 AngloGold Ashanti 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 AngloGold Ashanti i.e., AngloGold Ashanti and Coeur Mining go up and down completely randomly.

Pair Corralation between AngloGold Ashanti and Coeur Mining

Allowing for the 90-day total investment horizon AngloGold Ashanti plc is expected to under-perform the Coeur Mining. But the stock apears to be less risky and, when comparing its historical volatility, AngloGold Ashanti plc is 1.19 times less risky than Coeur Mining. The stock trades about -0.03 of its potential returns per unit of risk. The Coeur Mining is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  487.00  in Coeur Mining on February 5, 2024 and sell it today you would earn a total of  1.00  from holding Coeur Mining or generate 0.21% return on investment over 90 days.

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

AngloGold Ashanti plc  vs.  Coeur Mining

AngloGold Ashanti plc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AngloGold Ashanti plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, AngloGold Ashanti unveiled solid returns over the last few months and may actually be approaching a breakup point.

Coeur Mining

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coeur Mining are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Coeur Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AngloGold Ashanti and Coeur Mining

The main advantage of trading using opposite AngloGold Ashanti and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AngloGold Ashanti 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 AngloGold Ashanti 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.