Correlation Between NEW PACIFIC and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both NEW PACIFIC 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 NEW PACIFIC and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW PACIFIC METALS and MCEWEN MINING INC, you can compare the effects of market volatilities on NEW PACIFIC 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 NEW PACIFIC with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW PACIFIC and MCEWEN MINING.
Diversification Opportunities for NEW PACIFIC and MCEWEN MINING
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NEW and MCEWEN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding NEW PACIFIC METALS and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC and NEW PACIFIC 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 NEW PACIFIC METALS 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 INC has no effect on the direction of NEW PACIFIC i.e., NEW PACIFIC and MCEWEN MINING go up and down completely randomly.
Pair Corralation between NEW PACIFIC and MCEWEN MINING
Assuming the 90 days trading horizon NEW PACIFIC METALS is expected to generate 0.87 times more return on investment than MCEWEN MINING. However, NEW PACIFIC METALS is 1.14 times less risky than MCEWEN MINING. It trades about 0.08 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about 0.05 per unit of risk. If you would invest 135.00 in NEW PACIFIC METALS on September 13, 2024 and sell it today you would earn a total of 6.00 from holding NEW PACIFIC METALS or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW PACIFIC METALS vs. MCEWEN MINING INC
Performance |
| Timeline |
| NEW PACIFIC METALS |
| MCEWEN MINING INC |
NEW PACIFIC and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW PACIFIC and MCEWEN MINING
The main advantage of trading using opposite NEW PACIFIC and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW PACIFIC 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.| NEW PACIFIC vs. Superior Plus Corp | NEW PACIFIC vs. SIVERS SEMICONDUCTORS AB | NEW PACIFIC vs. Norsk Hydro ASA | NEW PACIFIC vs. Reliance Steel Aluminum |
| MCEWEN MINING vs. NEW PACIFIC METALS | MCEWEN MINING vs. Superior Plus Corp | MCEWEN MINING vs. SIVERS SEMICONDUCTORS AB | MCEWEN MINING vs. Norsk Hydro ASA |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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