Correlation Between McEwen Mining and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Baillie Gifford 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 Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Baillie Gifford European, you can compare the effects of market volatilities on McEwen Mining and Baillie Gifford 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 Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Baillie Gifford.
Diversification Opportunities for McEwen Mining and Baillie Gifford
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between McEwen and Baillie is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Baillie Gifford European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford European 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 Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford European has no effect on the direction of McEwen Mining i.e., McEwen Mining and Baillie Gifford go up and down completely randomly.
Pair Corralation between McEwen Mining and Baillie Gifford
Assuming the 90 days trading horizon McEwen Mining is expected to under-perform the Baillie Gifford. In addition to that, McEwen Mining is 3.81 times more volatile than Baillie Gifford European. It trades about -0.22 of its total potential returns per unit of risk. Baillie Gifford European is currently generating about -0.1 per unit of volatility. If you would invest 8,740 in Baillie Gifford European on September 22, 2024 and sell it today you would lose (330.00) from holding Baillie Gifford European or give up 3.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Baillie Gifford European
Performance |
| Timeline |
| McEwen Mining |
| Baillie Gifford European |
McEwen Mining and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Baillie Gifford
The main advantage of trading using opposite McEwen Mining and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford'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 |
| Baillie Gifford vs. McEwen Mining | Baillie Gifford vs. Panther Metals PLC | Baillie Gifford vs. Ebro Foods | Baillie Gifford vs. Sligro Food Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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