Correlation Between McEwen Mining and DXC Technology
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and DXC Technology 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 McEwen Mining and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and DXC Technology Co, you can compare the effects of market volatilities on McEwen Mining and DXC Technology 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 McEwen Mining with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and DXC Technology.
Diversification Opportunities for McEwen Mining and DXC Technology
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between McEwen and DXC is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and McEwen Mining 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 McEwen Mining are associated (or correlated) with DXC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXC Technology has no effect on the direction of McEwen Mining i.e., McEwen Mining and DXC Technology go up and down completely randomly.
Pair Corralation between McEwen Mining and DXC Technology
Assuming the 90 days trading horizon McEwen Mining is expected to generate 1.38 times more return on investment than DXC Technology. However, McEwen Mining is 1.38 times more volatile than DXC Technology Co. It trades about 0.03 of its potential returns per unit of risk. DXC Technology Co is currently generating about 0.0 per unit of risk. If you would invest 753.00 in McEwen Mining on September 2, 2024 and sell it today you would earn a total of 82.00 from holding McEwen Mining or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. DXC Technology Co
Performance |
| Timeline |
| McEwen Mining |
| DXC Technology |
McEwen Mining and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and DXC Technology
The main advantage of trading using opposite McEwen Mining and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, DXC Technology 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 DXC Technology will offset losses from the drop in DXC Technology's long position.| McEwen Mining vs. Uniper SE | McEwen Mining vs. Mulberry Group PLC | McEwen Mining vs. London Security Plc | McEwen Mining vs. Triad Group PLC |
| DXC Technology vs. Uniper SE | DXC Technology vs. Mulberry Group PLC | DXC Technology vs. London Security Plc | DXC Technology vs. Triad Group PLC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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