Correlation Between PennyMac Mortgage and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage 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 PennyMac Mortgage and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennyMac Mortgage Investment and MCEWEN MINING INC, you can compare the effects of market volatilities on PennyMac Mortgage 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 PennyMac Mortgage with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and MCEWEN MINING.
Diversification Opportunities for PennyMac Mortgage and MCEWEN MINING
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennyMac and MCEWEN is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment 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 PennyMac Mortgage 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 PennyMac Mortgage Investment 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 PennyMac Mortgage i.e., PennyMac Mortgage and MCEWEN MINING go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and MCEWEN MINING
Assuming the 90 days horizon PennyMac Mortgage is expected to generate 2.75 times less return on investment than MCEWEN MINING. But when comparing it to its historical volatility, PennyMac Mortgage Investment is 2.27 times less risky than MCEWEN MINING. It trades about 0.03 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 535.00 in MCEWEN MINING INC on September 3, 2024 and sell it today you would earn a total of 250.00 from holding MCEWEN MINING INC or generate 46.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennyMac Mortgage Investment vs. MCEWEN MINING INC
Performance |
| Timeline |
| PennyMac Mortgage |
| MCEWEN MINING INC |
PennyMac Mortgage and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and MCEWEN MINING
The main advantage of trading using opposite PennyMac Mortgage and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage 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.| PennyMac Mortgage vs. Superior Plus Corp | PennyMac Mortgage vs. NMI Holdings | PennyMac Mortgage vs. Origin Agritech | PennyMac Mortgage vs. SIVERS SEMICONDUCTORS AB |
| MCEWEN MINING vs. Superior Plus Corp | MCEWEN MINING vs. NMI Holdings | MCEWEN MINING vs. Origin Agritech | MCEWEN MINING vs. SIVERS SEMICONDUCTORS AB |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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