Correlation Between Avanos Medical and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both Avanos Medical 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 Avanos Medical and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanos Medical and MCEWEN MINING INC, you can compare the effects of market volatilities on Avanos Medical 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 Avanos Medical with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanos Medical and MCEWEN MINING.
Diversification Opportunities for Avanos Medical and MCEWEN MINING
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Avanos and MCEWEN is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Avanos Medical 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 Avanos Medical 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 Avanos Medical 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 Avanos Medical i.e., Avanos Medical and MCEWEN MINING go up and down completely randomly.
Pair Corralation between Avanos Medical and MCEWEN MINING
Assuming the 90 days trading horizon Avanos Medical is expected to generate 0.75 times more return on investment than MCEWEN MINING. However, Avanos Medical is 1.34 times less risky than MCEWEN MINING. It trades about 0.0 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about -0.06 per unit of risk. If you would invest 1,840 in Avanos Medical on September 2, 2024 and sell it today you would lose (50.00) from holding Avanos Medical or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanos Medical vs. MCEWEN MINING INC
Performance |
| Timeline |
| Avanos Medical |
| MCEWEN MINING INC |
Avanos Medical and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanos Medical and MCEWEN MINING
The main advantage of trading using opposite Avanos Medical and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanos Medical 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.| Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc |
| MCEWEN MINING vs. LG Electronics | MCEWEN MINING vs. LIFENET INSURANCE CO | MCEWEN MINING vs. STMicroelectronics NV | MCEWEN MINING vs. Electronic Arts |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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