Correlation Between McEwen Mining and Premier African
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Premier African 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 Premier African into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Premier African Minerals, you can compare the effects of market volatilities on McEwen Mining and Premier African 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 Premier African. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Premier African.
Diversification Opportunities for McEwen Mining and Premier African
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between McEwen and Premier is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Premier African Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier African Minerals 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 Premier African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier African Minerals has no effect on the direction of McEwen Mining i.e., McEwen Mining and Premier African go up and down completely randomly.
Pair Corralation between McEwen Mining and Premier African
Assuming the 90 days trading horizon McEwen Mining is expected to generate 0.45 times more return on investment than Premier African. However, McEwen Mining is 2.21 times less risky than Premier African. It trades about 0.04 of its potential returns per unit of risk. Premier African Minerals is currently generating about -0.04 per unit of risk. If you would invest 607.00 in McEwen Mining on November 7, 2024 and sell it today you would earn a total of 229.00 from holding McEwen Mining or generate 37.73% 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. Premier African Minerals
Performance |
| Timeline |
| McEwen Mining |
| Premier African Minerals |
McEwen Mining and Premier African Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Premier African
The main advantage of trading using opposite McEwen Mining and Premier African positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Premier African 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 Premier African will offset losses from the drop in Premier African's long position.| McEwen Mining vs. China Pacific Insurance | McEwen Mining vs. Foresight Environmental Infrastructure | McEwen Mining vs. British American Tobacco | McEwen Mining vs. United States Steel |
| Premier African vs. Tata Steel Limited | Premier African vs. First Class Metals | Premier African vs. Dentsply Sirona | Premier African vs. Coeur 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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