Correlation Between Coronado Global and Canaf Investments

Can any of the company-specific risk be diversified away by investing in both Coronado Global and Canaf Investments 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 Coronado Global and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coronado Global Resources and Canaf Investments, you can compare the effects of market volatilities on Coronado Global and Canaf Investments 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 Coronado Global with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coronado Global and Canaf Investments.

Diversification Opportunities for Coronado Global and Canaf Investments

-0.57

Correlation Coefficient

Coronado Global  Canaf Investments

Excellent diversification

The 3 months correlation between Coronado and Canaf is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Coronado Global Resources and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and Coronado Global 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 Coronado Global Resources are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Coronado Global i.e., Coronado Global and Canaf Investments go up and down completely randomly.

Pair Corralation between Coronado Global and Canaf Investments

If you would invest  75.00  in Coronado Global Resources on January 30, 2024 and sell it today you would earn a total of  0.00  from holding Coronado Global Resources or generate 0.0% return on investment over 90 days.

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

Coronado Global Resources  vs.  Canaf Investments

Coronado Global Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coronado Global Resources 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 quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Canaf Investments

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canaf Investments are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Canaf Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coronado Global and Canaf Investments

The main advantage of trading using opposite Coronado Global and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coronado Global position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.

The idea behind Coronado Global Resources and Canaf Investments 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..