Correlation Between McEwen Mining and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and AMG Advanced 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 AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and AMG Advanced Metallurgical, you can compare the effects of market volatilities on McEwen Mining and AMG Advanced 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 AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and AMG Advanced.
Diversification Opportunities for McEwen Mining and AMG Advanced
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McEwen and AMG is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of McEwen Mining i.e., McEwen Mining and AMG Advanced go up and down completely randomly.
Pair Corralation between McEwen Mining and AMG Advanced
Assuming the 90 days trading horizon McEwen Mining is expected to under-perform the AMG Advanced. In addition to that, McEwen Mining is 1.0 times more volatile than AMG Advanced Metallurgical. It trades about -0.24 of its total potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.21 per unit of volatility. If you would invest 1,558 in AMG Advanced Metallurgical on September 2, 2024 and sell it today you would lose (145.00) from holding AMG Advanced Metallurgical or give up 9.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| McEwen Mining |
| AMG Advanced Metallu |
McEwen Mining and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and AMG Advanced
The main advantage of trading using opposite McEwen Mining and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced'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 |
| AMG Advanced vs. Uniper SE | AMG Advanced vs. Mulberry Group PLC | AMG Advanced vs. London Security Plc | AMG Advanced 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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