Correlation Between McEwen Mining and Jadestone Energy
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Jadestone Energy 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 Jadestone Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Jadestone Energy, you can compare the effects of market volatilities on McEwen Mining and Jadestone Energy 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 Jadestone Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Jadestone Energy.
Diversification Opportunities for McEwen Mining and Jadestone Energy
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between McEwen and Jadestone is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Jadestone Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadestone Energy 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 Jadestone Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadestone Energy has no effect on the direction of McEwen Mining i.e., McEwen Mining and Jadestone Energy go up and down completely randomly.
Pair Corralation between McEwen Mining and Jadestone Energy
Assuming the 90 days trading horizon McEwen Mining is expected to generate 0.93 times more return on investment than Jadestone Energy. However, McEwen Mining is 1.07 times less risky than Jadestone Energy. It trades about 0.01 of its potential returns per unit of risk. Jadestone Energy is currently generating about 0.0 per unit of risk. If you would invest 906.00 in McEwen Mining on September 12, 2024 and sell it today you would lose (41.00) from holding McEwen Mining or give up 4.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.74% |
| Values | Daily Returns |
McEwen Mining vs. Jadestone Energy
Performance |
| Timeline |
| McEwen Mining |
| Jadestone Energy |
McEwen Mining and Jadestone Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Jadestone Energy
The main advantage of trading using opposite McEwen Mining and Jadestone Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Jadestone Energy 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 Jadestone Energy will offset losses from the drop in Jadestone Energy's long position.| McEwen Mining vs. Impax Environmental Markets | McEwen Mining vs. Amedeo Air Four | McEwen Mining vs. Sealed Air Corp | McEwen Mining vs. Flow Traders NV |
| Jadestone Energy vs. Odyssean Investment Trust | Jadestone Energy vs. AMG Advanced Metallurgical | Jadestone Energy vs. Herald Investment Trust | Jadestone Energy vs. McEwen Mining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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