Correlation Between Micron Technology and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Micron Technology 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 Micron Technology and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and McEwen Mining, you can compare the effects of market volatilities on Micron Technology 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 Micron Technology with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and McEwen Mining.
Diversification Opportunities for Micron Technology and McEwen Mining
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Micron and McEwen is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Micron Technology 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 Micron Technology 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 Micron Technology i.e., Micron Technology and McEwen Mining go up and down completely randomly.
Pair Corralation between Micron Technology and McEwen Mining
Assuming the 90 days trading horizon Micron Technology is expected to under-perform the McEwen Mining. In addition to that, Micron Technology is 1.67 times more volatile than McEwen Mining. It trades about -0.01 of its total potential returns per unit of risk. McEwen Mining is currently generating about -0.02 per unit of volatility. If you would invest 911.00 in McEwen Mining on November 2, 2024 and sell it today you would lose (53.00) from holding McEwen Mining or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Micron Technology vs. McEwen Mining
Performance |
| Timeline |
| Micron Technology |
| McEwen Mining |
Micron Technology and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and McEwen Mining
The main advantage of trading using opposite Micron Technology and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology 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.| Micron Technology vs. Spotify Technology SA | Micron Technology vs. Alaska Air Group | Micron Technology vs. Scandinavian Tobacco Group | Micron Technology vs. Take Two Interactive Software |
| McEwen Mining vs. LBG Media PLC | McEwen Mining vs. Lindsell Train Investment | McEwen Mining vs. OneSavings Bank PLC | McEwen Mining vs. Monks Investment Trust |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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