Correlation Between Futura Medical and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Futura Medical 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 Futura Medical and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futura Medical and McEwen Mining, you can compare the effects of market volatilities on Futura Medical 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 Futura Medical with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futura Medical and McEwen Mining.
Diversification Opportunities for Futura Medical and McEwen Mining
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Futura and McEwen is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Futura Medical and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Futura Medical 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 Futura Medical 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 Futura Medical i.e., Futura Medical and McEwen Mining go up and down completely randomly.
Pair Corralation between Futura Medical and McEwen Mining
Assuming the 90 days trading horizon Futura Medical is expected to generate 0.85 times more return on investment than McEwen Mining. However, Futura Medical is 1.18 times less risky than McEwen Mining. It trades about -0.23 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.24 per unit of risk. If you would invest 3,688 in Futura Medical on September 2, 2024 and sell it today you would lose (318.00) from holding Futura Medical or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futura Medical vs. McEwen Mining
Performance |
| Timeline |
| Futura Medical |
| McEwen Mining |
Futura Medical and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futura Medical and McEwen Mining
The main advantage of trading using opposite Futura Medical and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futura Medical 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.| Futura Medical vs. Viridian Therapeutics | Futura Medical vs. CVR Energy | Futura Medical vs. Nationwide Building Society | Futura Medical vs. Dollar Tree |
| McEwen Mining vs. Uniper SE | McEwen Mining vs. Mulberry Group PLC | McEwen Mining vs. London Security Plc | McEwen Mining vs. Triad Group PLC |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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