Correlation Between Advanced Medical and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Advanced 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 Advanced 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 Advanced Medical Solutions and McEwen Mining, you can compare the effects of market volatilities on Advanced 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 Advanced Medical with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and McEwen Mining.
Diversification Opportunities for Advanced Medical and McEwen Mining
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advanced and McEwen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Advanced 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 Advanced Medical Solutions 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 Advanced Medical i.e., Advanced Medical and McEwen Mining go up and down completely randomly.
Pair Corralation between Advanced Medical and McEwen Mining
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to generate 0.69 times more return on investment than McEwen Mining. However, Advanced Medical Solutions is 1.46 times less risky than McEwen Mining. It trades about -0.19 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.19 per unit of risk. If you would invest 20,800 in Advanced Medical Solutions on October 10, 2024 and sell it today you would lose (1,320) from holding Advanced Medical Solutions or give up 6.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. McEwen Mining
Performance |
| Timeline |
| Advanced Medical Sol |
| McEwen Mining |
Advanced Medical and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and McEwen Mining
The main advantage of trading using opposite Advanced Medical and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced 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.| Advanced Medical vs. Blackrock World Mining | Advanced Medical vs. Atalaya Mining | Advanced Medical vs. Impax Environmental Markets | Advanced Medical vs. PPHE Hotel Group |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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