Correlation Between McEwen Mining and BH Macro
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and BH Macro 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 BH Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and BH Macro Limited, you can compare the effects of market volatilities on McEwen Mining and BH Macro 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 BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and BH Macro.
Diversification Opportunities for McEwen Mining and BH Macro
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between McEwen and BHMU is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited 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 BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of McEwen Mining i.e., McEwen Mining and BH Macro go up and down completely randomly.
Pair Corralation between McEwen Mining and BH Macro
Assuming the 90 days trading horizon McEwen Mining is expected to under-perform the BH Macro. In addition to that, McEwen Mining is 2.44 times more volatile than BH Macro Limited. It trades about -0.08 of its total potential returns per unit of risk. BH Macro Limited is currently generating about 0.07 per unit of volatility. If you would invest 378.00 in BH Macro Limited on August 29, 2024 and sell it today you would earn a total of 40.00 from holding BH Macro Limited or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
McEwen Mining vs. BH Macro Limited
Performance |
| Timeline |
| McEwen Mining |
| BH Macro Limited |
McEwen Mining and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and BH Macro
The main advantage of trading using opposite McEwen Mining and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro's long position.| McEwen Mining vs. Lendinvest PLC | McEwen Mining vs. Neometals | McEwen Mining vs. Coor Service Management | McEwen Mining vs. Albion Technology General |
| BH Macro vs. Toyota Motor Corp | BH Macro vs. Lendinvest PLC | BH Macro vs. Neometals | BH Macro 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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