Correlation Between Tyson Foods and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods Cl and McEwen Mining, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and McEwen Mining.
Diversification Opportunities for Tyson Foods and McEwen Mining
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tyson and McEwen is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods Cl and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Tyson Foods 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 Tyson Foods Cl 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 Tyson Foods i.e., Tyson Foods and McEwen Mining go up and down completely randomly.
Pair Corralation between Tyson Foods and McEwen Mining
Assuming the 90 days trading horizon Tyson Foods Cl is expected to generate 0.62 times more return on investment than McEwen Mining. However, Tyson Foods Cl is 1.61 times less risky than McEwen Mining. It trades about 0.26 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.02 per unit of risk. If you would invest 5,798 in Tyson Foods Cl on September 5, 2024 and sell it today you would earn a total of 618.00 from holding Tyson Foods Cl or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods Cl vs. McEwen Mining
Performance |
| Timeline |
| Tyson Foods Cl |
| McEwen Mining |
Tyson Foods and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and McEwen Mining
The main advantage of trading using opposite Tyson Foods and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. Samsung Electronics Co | Tyson Foods vs. Samsung Electronics Co | Tyson Foods vs. Hyundai Motor | Tyson Foods vs. Toyota Motor Corp |
| McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Hyundai Motor | McEwen Mining vs. Toyota Motor 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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