Correlation Between DFS Furniture and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and MCEWEN MINING INC, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and MCEWEN MINING.
Diversification Opportunities for DFS Furniture and MCEWEN MINING
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between DFS and MCEWEN is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC 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 DFS Furniture 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 DFS Furniture 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 INC has no effect on the direction of DFS Furniture i.e., DFS Furniture and MCEWEN MINING go up and down completely randomly.
Pair Corralation between DFS Furniture and MCEWEN MINING
Assuming the 90 days trading horizon DFS Furniture is expected to generate 3.05 times less return on investment than MCEWEN MINING. But when comparing it to its historical volatility, DFS Furniture PLC is 1.4 times less risky than MCEWEN MINING. It trades about 0.01 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 615.00 in MCEWEN MINING INC on October 23, 2024 and sell it today you would earn a total of 180.00 from holding MCEWEN MINING INC or generate 29.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. MCEWEN MINING INC
Performance |
| Timeline |
| DFS Furniture PLC |
| MCEWEN MINING INC |
DFS Furniture and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and MCEWEN MINING
The main advantage of trading using opposite DFS Furniture and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
| MCEWEN MINING vs. ON SEMICONDUCTOR | MCEWEN MINING vs. DFS Furniture PLC | MCEWEN MINING vs. MagnaChip Semiconductor Corp | MCEWEN MINING vs. Taiwan Semiconductor Manufacturing |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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