Correlation Between McEwen Mining and Light Science
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Light Science 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 Light Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Light Science Technologies, you can compare the effects of market volatilities on McEwen Mining and Light Science 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 Light Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Light Science.
Diversification Opportunities for McEwen Mining and Light Science
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between McEwen and Light is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno 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 Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of McEwen Mining i.e., McEwen Mining and Light Science go up and down completely randomly.
Pair Corralation between McEwen Mining and Light Science
Assuming the 90 days trading horizon McEwen Mining is expected to generate 0.57 times more return on investment than Light Science. However, McEwen Mining is 1.75 times less risky than Light Science. It trades about 0.03 of its potential returns per unit of risk. Light Science Technologies is currently generating about 0.02 per unit of risk. If you would invest 663.00 in McEwen Mining on October 23, 2024 and sell it today you would earn a total of 177.00 from holding McEwen Mining or generate 26.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.0% |
| Values | Daily Returns |
McEwen Mining vs. Light Science Technologies
Performance |
| Timeline |
| McEwen Mining |
| Light Science Techno |
McEwen Mining and Light Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Light Science
The main advantage of trading using opposite McEwen Mining and Light Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Light Science 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 Light Science will offset losses from the drop in Light Science's long position.| McEwen Mining vs. Home Depot | McEwen Mining vs. Weiss Korea Opportunity | McEwen Mining vs. River and Mercantile | McEwen Mining vs. Chrysalis Investments |
| Light Science vs. Costco Wholesale Corp | Light Science vs. Moneta Money Bank | Light Science vs. Manulife Financial Corp | Light Science vs. Bankers Investment Trust |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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