Correlation Between McEwen Mining and NOV
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and NOV 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 NOV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and NOV Inc, you can compare the effects of market volatilities on McEwen Mining and NOV 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 NOV. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and NOV.
Diversification Opportunities for McEwen Mining and NOV
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between McEwen and NOV is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and NOV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOV Inc 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 NOV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOV Inc has no effect on the direction of McEwen Mining i.e., McEwen Mining and NOV go up and down completely randomly.
Pair Corralation between McEwen Mining and NOV
Assuming the 90 days trading horizon McEwen Mining is expected to generate 77.92 times more return on investment than NOV. However, McEwen Mining is 77.92 times more volatile than NOV Inc. It trades about 0.04 of its potential returns per unit of risk. NOV Inc is currently generating about 0.13 per unit of risk. If you would invest 615.00 in McEwen Mining on September 14, 2024 and sell it today you would earn a total of 257.00 from holding McEwen Mining or generate 41.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
McEwen Mining vs. NOV Inc
Performance |
| Timeline |
| McEwen Mining |
| NOV Inc |
McEwen Mining and NOV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and NOV
The main advantage of trading using opposite McEwen Mining and NOV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, NOV 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 NOV will offset losses from the drop in NOV's long position.| McEwen Mining vs. Spirent Communications plc | McEwen Mining vs. Batm Advanced Communications | McEwen Mining vs. Auction Technology Group | McEwen Mining vs. Alfa Financial Software |
| NOV vs. MediaZest plc | NOV vs. McEwen Mining | NOV vs. Universal Music Group | NOV vs. European Metals Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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