Correlation Between Dotdigital Group and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Dotdigital Group 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 Dotdigital Group and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dotdigital Group Plc and McEwen Mining, you can compare the effects of market volatilities on Dotdigital Group 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 Dotdigital Group with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dotdigital Group and McEwen Mining.
Diversification Opportunities for Dotdigital Group and McEwen Mining
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dotdigital and McEwen is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dotdigital Group Plc and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Dotdigital Group 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 Dotdigital Group 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 has no effect on the direction of Dotdigital Group i.e., Dotdigital Group and McEwen Mining go up and down completely randomly.
Pair Corralation between Dotdigital Group and McEwen Mining
Assuming the 90 days trading horizon Dotdigital Group Plc is expected to under-perform the McEwen Mining. In addition to that, Dotdigital Group is 1.02 times more volatile than McEwen Mining. It trades about -0.08 of its total potential returns per unit of risk. McEwen Mining is currently generating about 0.15 per unit of volatility. If you would invest 793.00 in McEwen Mining on October 23, 2024 and sell it today you would earn a total of 47.00 from holding McEwen Mining or generate 5.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Dotdigital Group Plc vs. McEwen Mining
Performance |
Timeline |
Dotdigital Group Plc |
McEwen Mining |
Dotdigital Group and McEwen Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dotdigital Group and McEwen Mining
The main advantage of trading using opposite Dotdigital Group and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dotdigital Group 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.Dotdigital Group vs. Batm Advanced Communications | Dotdigital Group vs. Extra Space Storage | Dotdigital Group vs. GlobalData PLC | Dotdigital Group vs. Creo Medical Group |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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