Correlation Between McEwen Mining and Monks Investment
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Monks Investment 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 Monks Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Monks Investment Trust, you can compare the effects of market volatilities on McEwen Mining and Monks Investment 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 Monks Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Monks Investment.
Diversification Opportunities for McEwen Mining and Monks Investment
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between McEwen and Monks is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Monks Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monks Investment Trust 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 Monks Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monks Investment Trust has no effect on the direction of McEwen Mining i.e., McEwen Mining and Monks Investment go up and down completely randomly.
Pair Corralation between McEwen Mining and Monks Investment
Assuming the 90 days trading horizon McEwen Mining is expected to generate 1.29 times less return on investment than Monks Investment. In addition to that, McEwen Mining is 3.79 times more volatile than Monks Investment Trust. It trades about 0.01 of its total potential returns per unit of risk. Monks Investment Trust is currently generating about 0.07 per unit of volatility. If you would invest 100,890 in Monks Investment Trust on September 12, 2024 and sell it today you would earn a total of 26,310 from holding Monks Investment Trust or generate 26.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.89% |
| Values | Daily Returns |
McEwen Mining vs. Monks Investment Trust
Performance |
| Timeline |
| McEwen Mining |
| Monks Investment Trust |
McEwen Mining and Monks Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Monks Investment
The main advantage of trading using opposite McEwen Mining and Monks Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Monks Investment 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 Monks Investment will offset losses from the drop in Monks Investment'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 |
| Monks Investment vs. G5 Entertainment AB | Monks Investment vs. Planet Fitness Cl | Monks Investment vs. One Media iP | Monks Investment vs. CVS Health Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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