While the remarkable rise of gold and silver this year has dramatically elevated the underlying mining complex, the market is a cruelly chaotic and non-linear environment. As such, a steep correction was perhaps inevitable, something that Coeur Mining Inc (NYSE:CDE) is finding out the hard way. Since mid-October, CDE stock plunged about 26%. Still, the red ink could open up a contrarian opportunity.
In the retail investment market, it's not uncommon to witness people urging others to buy the dip. In an indirect manner, this sentiment aligns with the market's heteroskedastic behavior, which states that variance (volatility) is not constant over time. When applied to the equities arena, heteroskedasticity infers volatility clustering — periods of high volatility tend to follow high volatility and vice versa for quiet periods.
