Correlation Between Alfa Financial and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and McEwen Mining, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and McEwen Mining.
Diversification Opportunities for Alfa Financial and McEwen Mining
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alfa and McEwen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and McEwen Mining go up and down completely randomly.
Pair Corralation between Alfa Financial and McEwen Mining
Assuming the 90 days trading horizon Alfa Financial is expected to generate 8.03 times less return on investment than McEwen Mining. But when comparing it to its historical volatility, Alfa Financial Software is 1.26 times less risky than McEwen Mining. It trades about 0.02 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 817.00 in McEwen Mining on September 14, 2024 and sell it today you would earn a total of 55.00 from holding McEwen Mining or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. McEwen Mining
Performance |
| Timeline |
| Alfa Financial Software |
| McEwen Mining |
Alfa Financial and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and McEwen Mining
The main advantage of trading using opposite Alfa Financial and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. National Beverage Corp | Alfa Financial vs. Tyson Foods Cl | Alfa Financial vs. McEwen Mining | Alfa Financial vs. Anglesey Mining |
| McEwen Mining vs. Spirent Communications plc | McEwen Mining vs. Batm Advanced Communications | McEwen Mining vs. Auction Technology Group | McEwen Mining vs. Alfa Financial Software |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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