Correlation Between McEwen Mining and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Wheaton Precious 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 Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Wheaton Precious Metals, you can compare the effects of market volatilities on McEwen Mining and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Wheaton Precious.
Diversification Opportunities for McEwen Mining and Wheaton Precious
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between McEwen and Wheaton is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of McEwen Mining i.e., McEwen Mining and Wheaton Precious go up and down completely randomly.
Pair Corralation between McEwen Mining and Wheaton Precious
Assuming the 90 days trading horizon McEwen Mining is expected to generate 2.13 times more return on investment than Wheaton Precious. However, McEwen Mining is 2.13 times more volatile than Wheaton Precious Metals. It trades about 0.24 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.38 per unit of risk. If you would invest 801.00 in McEwen Mining on November 28, 2024 and sell it today you would earn a total of 34.00 from holding McEwen Mining or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.27% |
| Values | Daily Returns |
McEwen Mining vs. Wheaton Precious Metals
Performance |
| Timeline |
| McEwen Mining |
Risk-Adjusted Performance
Weak
Weak | Strong |
| Wheaton Precious Metals |
McEwen Mining and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Wheaton Precious
The main advantage of trading using opposite McEwen Mining and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' long position.| McEwen Mining vs. Gamma Communications PLC | McEwen Mining vs. Zoom Video Communications | McEwen Mining vs. Silvercorp Metals | McEwen Mining vs. Monster Beverage Corp |
| Wheaton Precious vs. CNH Industrial NV | Wheaton Precious vs. Jacquet Metal Service | Wheaton Precious vs. Aeorema Communications Plc | Wheaton Precious vs. First Class Metals |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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