Correlation Between Diamcor Mining and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Diamcor Mining 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 Diamcor Mining and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamcor Mining and McEwen Mining, you can compare the effects of market volatilities on Diamcor Mining 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 Diamcor Mining with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamcor Mining and McEwen Mining.
Diversification Opportunities for Diamcor Mining and McEwen Mining
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diamcor and McEwen is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Diamcor Mining and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Diamcor Mining 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 Diamcor Mining 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 Diamcor Mining i.e., Diamcor Mining and McEwen Mining go up and down completely randomly.
Pair Corralation between Diamcor Mining and McEwen Mining
Assuming the 90 days horizon Diamcor Mining is expected to generate 1.14 times less return on investment than McEwen Mining. In addition to that, Diamcor Mining is 2.89 times more volatile than McEwen Mining. It trades about 0.01 of its total potential returns per unit of risk. McEwen Mining is currently generating about 0.03 per unit of volatility. If you would invest 723.00 in McEwen Mining on August 29, 2024 and sell it today you would earn a total of 99.00 from holding McEwen Mining or generate 13.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamcor Mining vs. McEwen Mining
Performance |
| Timeline |
| Diamcor Mining |
| McEwen Mining |
Diamcor Mining and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamcor Mining and McEwen Mining
The main advantage of trading using opposite Diamcor Mining and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamcor Mining 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.| Diamcor Mining vs. New Pacific Metals | Diamcor Mining vs. Star Royalties | Diamcor Mining vs. Teuton Resources Corp |
| McEwen Mining vs. Endeavour Silver Corp | McEwen Mining vs. Fortuna Silver Mines | McEwen Mining vs. New Gold | McEwen Mining vs. Sandstorm Gold 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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