Correlation Between Anglo Eastern and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Anglo Eastern 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 Anglo Eastern and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglo Eastern Plantations PLC and McEwen Mining, you can compare the effects of market volatilities on Anglo Eastern 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 Anglo Eastern with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Eastern and McEwen Mining.
Diversification Opportunities for Anglo Eastern and McEwen Mining
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anglo and McEwen is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Eastern Plantations PLC and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Anglo Eastern 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 Anglo Eastern Plantations PLC 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 Anglo Eastern i.e., Anglo Eastern and McEwen Mining go up and down completely randomly.
Pair Corralation between Anglo Eastern and McEwen Mining
Assuming the 90 days trading horizon Anglo Eastern Plantations PLC is expected to under-perform the McEwen Mining. But the stock apears to be less risky and, when comparing its historical volatility, Anglo Eastern Plantations PLC is 1.63 times less risky than McEwen Mining. The stock trades about -0.03 of its potential returns per unit of risk. The McEwen Mining is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 810.00 in McEwen Mining on September 13, 2024 and sell it today you would earn a total of 93.00 from holding McEwen Mining or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo Eastern Plantations PLC vs. McEwen Mining
Performance |
| Timeline |
| Anglo Eastern Planta |
| McEwen Mining |
Anglo Eastern and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Eastern and McEwen Mining
The main advantage of trading using opposite Anglo Eastern and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Eastern 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.| Anglo Eastern vs. AMG Advanced Metallurgical | Anglo Eastern vs. Raytheon Technologies Corp | Anglo Eastern vs. Wheaton Precious Metals | Anglo Eastern vs. Made Tech Group |
| McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Hyundai Motor | McEwen Mining vs. Reliance Industries Ltd |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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