Correlation Between BYD and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both BYD 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 BYD and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and McEwen Mining, you can compare the effects of market volatilities on BYD 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 BYD with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and McEwen Mining.
Diversification Opportunities for BYD and McEwen Mining
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BYD and McEwen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and BYD 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 BYD Co 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 BYD i.e., BYD and McEwen Mining go up and down completely randomly.
Pair Corralation between BYD and McEwen Mining
Assuming the 90 days trading horizon BYD Co is expected to generate 1.62 times more return on investment than McEwen Mining. However, BYD is 1.62 times more volatile than McEwen Mining. It trades about 0.06 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.13 per unit of risk. If you would invest 3,456 in BYD Co on October 10, 2024 and sell it today you would earn a total of 104.00 from holding BYD Co or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
BYD Co vs. McEwen Mining
Performance |
| Timeline |
| BYD Co |
| McEwen Mining |
BYD and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and McEwen Mining
The main advantage of trading using opposite BYD and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD 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.| BYD vs. Panther Metals PLC | BYD vs. First Class Metals | BYD vs. CNH Industrial NV | BYD vs. Kinnevik Investment AB |
| McEwen Mining vs. Adriatic Metals | McEwen Mining vs. Fulcrum Metals PLC | McEwen Mining vs. JB Hunt Transport | McEwen Mining vs. Impax Asset Management |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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