Correlation Between Fortuna Silver and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Fortuna Silver 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 Fortuna Silver and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortuna Silver Mines and McEwen Mining, you can compare the effects of market volatilities on Fortuna Silver 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 Fortuna Silver with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortuna Silver and McEwen Mining.
Diversification Opportunities for Fortuna Silver and McEwen Mining
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortuna and McEwen is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Fortuna Silver 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 Fortuna Silver Mines 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 Fortuna Silver i.e., Fortuna Silver and McEwen Mining go up and down completely randomly.
Pair Corralation between Fortuna Silver and McEwen Mining
Considering the 90-day investment horizon Fortuna Silver is expected to generate 1.44 times less return on investment than McEwen Mining. But when comparing it to its historical volatility, Fortuna Silver Mines is 1.17 times less risky than McEwen Mining. It trades about 0.03 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 537.00 in McEwen Mining on August 24, 2024 and sell it today you would earn a total of 301.00 from holding McEwen Mining or generate 56.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortuna Silver Mines vs. McEwen Mining
Performance |
| Timeline |
| Fortuna Silver Mines |
| McEwen Mining |
Fortuna Silver and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortuna Silver and McEwen Mining
The main advantage of trading using opposite Fortuna Silver and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortuna Silver 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.| Fortuna Silver vs. Pan American Silver | Fortuna Silver vs. Harmony Gold Mining | Fortuna Silver vs. IAMGold | Fortuna Silver vs. Kinross Gold |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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