Correlation Between McEwen Mining and Beowulf Mining
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Beowulf Mining 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 Beowulf Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Beowulf Mining, you can compare the effects of market volatilities on McEwen Mining and Beowulf Mining 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 Beowulf Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Beowulf Mining.
Diversification Opportunities for McEwen Mining and Beowulf Mining
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McEwen and Beowulf is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Beowulf Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beowulf Mining 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 Beowulf Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beowulf Mining has no effect on the direction of McEwen Mining i.e., McEwen Mining and Beowulf Mining go up and down completely randomly.
Pair Corralation between McEwen Mining and Beowulf Mining
Assuming the 90 days trading horizon McEwen Mining is expected to generate 4.17 times less return on investment than Beowulf Mining. In addition to that, McEwen Mining is 1.04 times more volatile than Beowulf Mining. It trades about 0.05 of its total potential returns per unit of risk. Beowulf Mining is currently generating about 0.21 per unit of volatility. If you would invest 1,450 in Beowulf Mining on November 3, 2024 and sell it today you would earn a total of 150.00 from holding Beowulf Mining or generate 10.34% 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. Beowulf Mining
Performance |
| Timeline |
| McEwen Mining |
| Beowulf Mining |
McEwen Mining and Beowulf Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Beowulf Mining
The main advantage of trading using opposite McEwen Mining and Beowulf Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Beowulf Mining 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 Beowulf Mining will offset losses from the drop in Beowulf Mining's long position.| McEwen Mining vs. Verizon Communications | McEwen Mining vs. Aeorema Communications Plc | McEwen Mining vs. MyHealthChecked Plc | McEwen Mining vs. Primary Health Properties |
| Beowulf Mining vs. Lowland Investment Co | Beowulf Mining vs. Verizon Communications | Beowulf Mining vs. JPMorgan Japanese Investment | Beowulf Mining vs. Gamma Communications 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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