Correlation Between McEwen Mining and Auction Technology
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Auction 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 Auction 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 Auction Technology Group, you can compare the effects of market volatilities on McEwen Mining and Auction 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Auction Technology.
Diversification Opportunities for McEwen Mining and Auction Technology
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between McEwen and Auction is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of McEwen Mining i.e., McEwen Mining and Auction Technology go up and down completely randomly.
Pair Corralation between McEwen Mining and Auction Technology
Assuming the 90 days trading horizon McEwen Mining is expected to generate 2.22 times less return on investment than Auction Technology. But when comparing it to its historical volatility, McEwen Mining is 1.19 times less risky than Auction Technology. It trades about 0.13 of its potential returns per unit of risk. Auction Technology Group is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 46,300 in Auction Technology Group on September 12, 2024 and sell it today you would earn a total of 10,200 from holding Auction Technology Group or generate 22.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Auction Technology Group
Performance |
| Timeline |
| McEwen Mining |
| Auction Technology |
McEwen Mining and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Auction Technology
The main advantage of trading using opposite McEwen Mining and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Auction 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| McEwen Mining vs. Impax Environmental Markets | McEwen Mining vs. Amedeo Air Four | McEwen Mining vs. Sealed Air Corp | McEwen Mining vs. Flow Traders NV |
| Auction Technology vs. Home Depot | Auction Technology vs. Chrysalis Investments | Auction Technology vs. Neometals | Auction Technology vs. Coor Service Management |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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