Correlation Between McEwen Mining and International Biotechnology
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and International Biotechnology 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 International Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and International Biotechnology Trust, you can compare the effects of market volatilities on McEwen Mining and International Biotechnology 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 International Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and International Biotechnology.
Diversification Opportunities for McEwen Mining and International Biotechnology
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between McEwen and International is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and International Biotechnology Tr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Biotechnology 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 International Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Biotechnology has no effect on the direction of McEwen Mining i.e., McEwen Mining and International Biotechnology go up and down completely randomly.
Pair Corralation between McEwen Mining and International Biotechnology
Assuming the 90 days trading horizon McEwen Mining is expected to generate 2.55 times more return on investment than International Biotechnology. However, McEwen Mining is 2.55 times more volatile than International Biotechnology Trust. It trades about 0.1 of its potential returns per unit of risk. International Biotechnology Trust is currently generating about 0.0 per unit of risk. If you would invest 817.00 in McEwen Mining on September 14, 2024 and sell it today you would earn a total of 55.00 from holding McEwen Mining or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. International Biotechnology Tr
Performance |
| Timeline |
| McEwen Mining |
| International Biotechnology |
McEwen Mining and International Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and International Biotechnology
The main advantage of trading using opposite McEwen Mining and International Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, International Biotechnology 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 International Biotechnology will offset losses from the drop in International Biotechnology's long position.| McEwen Mining vs. Spirent Communications plc | McEwen Mining vs. Batm Advanced Communications | McEwen Mining vs. Auction Technology Group | McEwen Mining vs. Alfa Financial Software |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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