Correlation Between Aurora Investment and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Aurora Investment 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 Aurora Investment and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Investment Trust and McEwen Mining, you can compare the effects of market volatilities on Aurora Investment 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 Aurora Investment with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and McEwen Mining.
Diversification Opportunities for Aurora Investment and McEwen Mining
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and McEwen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Aurora Investment 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 Aurora Investment Trust 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 Aurora Investment i.e., Aurora Investment and McEwen Mining go up and down completely randomly.
Pair Corralation between Aurora Investment and McEwen Mining
Assuming the 90 days trading horizon Aurora Investment Trust is expected to under-perform the McEwen Mining. But the stock apears to be less risky and, when comparing its historical volatility, Aurora Investment Trust is 3.21 times less risky than McEwen Mining. The stock trades about -0.08 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Investment Trust vs. McEwen Mining
Performance |
| Timeline |
| Aurora Investment Trust |
| McEwen Mining |
Aurora Investment and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Investment and McEwen Mining
The main advantage of trading using opposite Aurora Investment and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment 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.| Aurora Investment vs. Catalyst Media Group | Aurora Investment vs. CATLIN GROUP | Aurora Investment vs. Tamburi Investment Partners | Aurora Investment vs. Magnora ASA |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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