Correlation Between McEwen Mining and Sydbank
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Sydbank 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 Sydbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Sydbank, you can compare the effects of market volatilities on McEwen Mining and Sydbank 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 Sydbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Sydbank.
Diversification Opportunities for McEwen Mining and Sydbank
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between McEwen and Sydbank is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Sydbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank 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 Sydbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank has no effect on the direction of McEwen Mining i.e., McEwen Mining and Sydbank go up and down completely randomly.
Pair Corralation between McEwen Mining and Sydbank
Assuming the 90 days trading horizon McEwen Mining is expected to generate 4.88 times less return on investment than Sydbank. In addition to that, McEwen Mining is 2.59 times more volatile than Sydbank. It trades about 0.02 of its total potential returns per unit of risk. Sydbank is currently generating about 0.19 per unit of volatility. If you would invest 33,980 in Sydbank on September 5, 2024 and sell it today you would earn a total of 1,630 from holding Sydbank or generate 4.8% 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. Sydbank
Performance |
| Timeline |
| McEwen Mining |
| Sydbank |
McEwen Mining and Sydbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Sydbank
The main advantage of trading using opposite McEwen Mining and Sydbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Sydbank 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 Sydbank will offset losses from the drop in Sydbank's long position.| McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Hyundai Motor | McEwen Mining vs. Toyota Motor Corp |
| Sydbank vs. McEwen Mining | Sydbank vs. Playtech Plc | Sydbank vs. Hochschild Mining plc | Sydbank vs. Neometals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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