Correlation Between Faron Pharmaceuticals and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Faron Pharmaceuticals 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 Faron Pharmaceuticals and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faron Pharmaceuticals Oy and McEwen Mining, you can compare the effects of market volatilities on Faron Pharmaceuticals 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 Faron Pharmaceuticals with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faron Pharmaceuticals and McEwen Mining.
Diversification Opportunities for Faron Pharmaceuticals and McEwen Mining
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Faron and McEwen is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Faron Pharmaceuticals Oy and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Faron Pharmaceuticals 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 Faron Pharmaceuticals Oy 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 Faron Pharmaceuticals i.e., Faron Pharmaceuticals and McEwen Mining go up and down completely randomly.
Pair Corralation between Faron Pharmaceuticals and McEwen Mining
Assuming the 90 days trading horizon Faron Pharmaceuticals Oy is expected to generate 1.6 times more return on investment than McEwen Mining. However, Faron Pharmaceuticals is 1.6 times more volatile than McEwen Mining. It trades about 0.12 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.01 per unit of risk. If you would invest 15,250 in Faron Pharmaceuticals Oy on October 26, 2024 and sell it today you would earn a total of 3,250 from holding Faron Pharmaceuticals Oy or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Faron Pharmaceuticals Oy vs. McEwen Mining
Performance |
| Timeline |
| Faron Pharmaceuticals |
| McEwen Mining |
Faron Pharmaceuticals and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faron Pharmaceuticals and McEwen Mining
The main advantage of trading using opposite Faron Pharmaceuticals and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faron Pharmaceuticals 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.| Faron Pharmaceuticals vs. McEwen Mining | Faron Pharmaceuticals vs. iShares Physical Silver | Faron Pharmaceuticals vs. Premier Foods PLC | Faron Pharmaceuticals vs. MoneysupermarketCom Group PLC |
| McEwen Mining vs. Nordea Bank Abp | McEwen Mining vs. St Galler Kantonalbank | McEwen Mining vs. Discover Financial Services | McEwen Mining vs. Synchrony Financial |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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