Correlation Between LIFENET INSURANCE and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE 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 LIFENET INSURANCE and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and MCEWEN MINING INC, you can compare the effects of market volatilities on LIFENET INSURANCE 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 LIFENET INSURANCE with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and MCEWEN MINING.
Diversification Opportunities for LIFENET INSURANCE and MCEWEN MINING
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LIFENET and MCEWEN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO 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 LIFENET INSURANCE 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 LIFENET INSURANCE 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 INC has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and MCEWEN MINING go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and MCEWEN MINING
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to generate 0.43 times more return on investment than MCEWEN MINING. However, LIFENET INSURANCE CO is 2.3 times less risky than MCEWEN MINING. It trades about 0.24 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about -0.23 per unit of risk. If you would invest 1,110 in LIFENET INSURANCE CO on August 25, 2024 and sell it today you would earn a total of 100.00 from holding LIFENET INSURANCE CO or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. MCEWEN MINING INC
Performance |
| Timeline |
| LIFENET INSURANCE |
| MCEWEN MINING INC |
LIFENET INSURANCE and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and MCEWEN MINING
The main advantage of trading using opposite LIFENET INSURANCE and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE 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.| LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX | LIFENET INSURANCE vs. Xtrackers LevDAX |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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