Correlation Between McEwen Mining and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Aurora Investment 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 Aurora Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Aurora Investment Trust, you can compare the effects of market volatilities on McEwen Mining and Aurora Investment 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 Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Aurora Investment.
Diversification Opportunities for McEwen Mining and Aurora Investment
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McEwen and Aurora is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Aurora Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Investment Trust 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 Aurora Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Investment Trust has no effect on the direction of McEwen Mining i.e., McEwen Mining and Aurora Investment go up and down completely randomly.
Pair Corralation between McEwen Mining and Aurora Investment
Assuming the 90 days trading horizon McEwen Mining is expected to generate 3.21 times more return on investment than Aurora Investment. However, McEwen Mining is 3.21 times more volatile than Aurora Investment Trust. It trades about 0.16 of its potential returns per unit of risk. Aurora Investment Trust is currently generating about -0.08 per unit of risk. If you would invest 810.00 in McEwen Mining on September 13, 2024 and sell it today you would earn a total of 93.00 from holding McEwen Mining or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Aurora Investment Trust
Performance |
| Timeline |
| McEwen Mining |
| Aurora Investment Trust |
McEwen Mining and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Aurora Investment
The main advantage of trading using opposite McEwen Mining and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Aurora Investment 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 Aurora Investment will offset losses from the drop in Aurora Investment's long position.| McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Hyundai Motor | McEwen Mining vs. Reliance Industries Ltd |
| Aurora Investment vs. Catalyst Media Group | Aurora Investment vs. CATLIN GROUP | Aurora Investment vs. Tamburi Investment Partners | Aurora Investment vs. Magnora ASA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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