Correlation Between Prudential Financial and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Prudential Financial and McEwen Mining 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 Prudential Financial and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Financial and McEwen Mining, you can compare the effects of market volatilities on Prudential Financial and McEwen Mining 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 Prudential Financial with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Financial and McEwen Mining.
Diversification Opportunities for Prudential Financial and McEwen Mining
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Prudential and McEwen is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Financial and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Prudential Financial 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 Prudential Financial are associated (or correlated) with McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Prudential Financial i.e., Prudential Financial and McEwen Mining go up and down completely randomly.
Pair Corralation between Prudential Financial and McEwen Mining
Assuming the 90 days trading horizon Prudential Financial is expected to under-perform the McEwen Mining. But the stock apears to be less risky and, when comparing its historical volatility, Prudential Financial is 1.8 times less risky than McEwen Mining. The stock trades about -0.19 of its potential returns per unit of risk. The McEwen Mining is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 839.00 in McEwen Mining on October 14, 2024 and sell it today you would earn a total of 0.00 from holding McEwen Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Financial vs. McEwen Mining
Performance |
| Timeline |
| Prudential Financial |
| McEwen Mining |
Prudential Financial and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Financial and McEwen Mining
The main advantage of trading using opposite Prudential Financial and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Financial position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Prudential Financial vs. Alliance Data Systems | Prudential Financial vs. Silver Bullet Data | Prudential Financial vs. Ebro Foods | Prudential Financial vs. Monster Beverage Corp |
| McEwen Mining vs. Coeur Mining | McEwen Mining vs. Optima Health plc | McEwen Mining vs. Hochschild Mining plc | McEwen Mining vs. Cornish 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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