Correlation Between McEwen Mining and Capital Drilling
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Capital Drilling 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 Capital Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Capital Drilling, you can compare the effects of market volatilities on McEwen Mining and Capital Drilling 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 Capital Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Capital Drilling.
Diversification Opportunities for McEwen Mining and Capital Drilling
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between McEwen and Capital is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Capital Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Drilling 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 Capital Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Drilling has no effect on the direction of McEwen Mining i.e., McEwen Mining and Capital Drilling go up and down completely randomly.
Pair Corralation between McEwen Mining and Capital Drilling
Assuming the 90 days trading horizon McEwen Mining is expected to generate 0.63 times more return on investment than Capital Drilling. However, McEwen Mining is 1.58 times less risky than Capital Drilling. It trades about 0.15 of its potential returns per unit of risk. Capital Drilling is currently generating about -0.1 per unit of risk. If you would invest 791.00 in McEwen Mining on October 25, 2024 and sell it today you would earn a total of 49.00 from holding McEwen Mining or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
McEwen Mining vs. Capital Drilling
Performance |
| Timeline |
| McEwen Mining |
| Capital Drilling |
McEwen Mining and Capital Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Capital Drilling
The main advantage of trading using opposite McEwen Mining and Capital Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Capital Drilling 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 Capital Drilling will offset losses from the drop in Capital Drilling's long position.| McEwen Mining vs. XLMedia PLC | McEwen Mining vs. Fonix Mobile plc | McEwen Mining vs. Catalyst Media Group | McEwen Mining vs. Liberty Media Corp |
| Capital Drilling vs. Moneta Money Bank | Capital Drilling vs. Cembra Money Bank | Capital Drilling vs. Erste Group Bank | Capital Drilling vs. Wizz Air Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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