Correlation Between Dairy Farm and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both Dairy Farm 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 Dairy Farm and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dairy Farm International and MCEWEN MINING INC, you can compare the effects of market volatilities on Dairy Farm 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 Dairy Farm with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dairy Farm and MCEWEN MINING.
Diversification Opportunities for Dairy Farm and MCEWEN MINING
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dairy and MCEWEN is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dairy Farm International 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 Dairy Farm 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 Dairy Farm International 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 Dairy Farm i.e., Dairy Farm and MCEWEN MINING go up and down completely randomly.
Pair Corralation between Dairy Farm and MCEWEN MINING
Assuming the 90 days trading horizon Dairy Farm International is expected to generate 0.56 times more return on investment than MCEWEN MINING. However, Dairy Farm International is 1.79 times less risky than MCEWEN MINING. It trades about 0.1 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about -0.14 per unit of risk. If you would invest 197.00 in Dairy Farm International on September 19, 2024 and sell it today you would earn a total of 15.00 from holding Dairy Farm International or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dairy Farm International vs. MCEWEN MINING INC
Performance |
| Timeline |
| Dairy Farm International |
| MCEWEN MINING INC |
Dairy Farm and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dairy Farm and MCEWEN MINING
The main advantage of trading using opposite Dairy Farm and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dairy Farm 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.| Dairy Farm vs. Loblaw Companies Limited | Dairy Farm vs. Superior Plus Corp | Dairy Farm vs. SIVERS SEMICONDUCTORS AB | Dairy Farm vs. Norsk Hydro ASA |
| MCEWEN MINING vs. Virtus Investment Partners | MCEWEN MINING vs. Chongqing Machinery Electric | MCEWEN MINING vs. Dairy Farm International | MCEWEN MINING vs. WIMFARM SA EO |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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