Correlation Between Big 5 and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both Big 5 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 Big 5 and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big 5 Sporting and MCEWEN MINING INC, you can compare the effects of market volatilities on Big 5 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 Big 5 with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big 5 and MCEWEN MINING.
Diversification Opportunities for Big 5 and MCEWEN MINING
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Big and MCEWEN is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Big 5 Sporting 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 Big 5 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 Big 5 Sporting 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 Big 5 i.e., Big 5 and MCEWEN MINING go up and down completely randomly.
Pair Corralation between Big 5 and MCEWEN MINING
Assuming the 90 days horizon Big 5 Sporting is expected to under-perform the MCEWEN MINING. In addition to that, Big 5 is 1.28 times more volatile than MCEWEN MINING INC. It trades about -0.08 of its total potential returns per unit of risk. MCEWEN MINING INC is currently generating about 0.04 per unit of volatility. If you would invest 660.00 in MCEWEN MINING INC on September 4, 2024 and sell it today you would earn a total of 125.00 from holding MCEWEN MINING INC or generate 18.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big 5 Sporting vs. MCEWEN MINING INC
Performance |
| Timeline |
| Big 5 Sporting |
| MCEWEN MINING INC |
Big 5 and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big 5 and MCEWEN MINING
The main advantage of trading using opposite Big 5 and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big 5 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.The idea behind Big 5 Sporting and MCEWEN MINING INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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