Correlation Between Ferrexpo PLC and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC 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 Ferrexpo PLC and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and McEwen Mining, you can compare the effects of market volatilities on Ferrexpo PLC 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 Ferrexpo PLC with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and McEwen Mining.
Diversification Opportunities for Ferrexpo PLC and McEwen Mining
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ferrexpo and McEwen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Ferrexpo PLC 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 Ferrexpo 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 Ferrexpo PLC i.e., Ferrexpo PLC and McEwen Mining go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and McEwen Mining
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 1.76 times more return on investment than McEwen Mining. However, Ferrexpo PLC is 1.76 times more volatile than McEwen Mining. It trades about 0.13 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.06 per unit of risk. If you would invest 4,335 in Ferrexpo PLC on September 3, 2024 and sell it today you would earn a total of 4,665 from holding Ferrexpo PLC or generate 107.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Ferrexpo PLC vs. McEwen Mining
Performance |
| Timeline |
| Ferrexpo PLC |
| McEwen Mining |
Ferrexpo PLC and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and McEwen Mining
The main advantage of trading using opposite Ferrexpo PLC and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC 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.| Ferrexpo PLC vs. The Investment | Ferrexpo PLC vs. Odyssean Investment Trust | Ferrexpo PLC vs. Lowland Investment Co | Ferrexpo PLC vs. Monster Beverage Corp |
| McEwen Mining vs. Evolution Gaming Group | McEwen Mining vs. Central Asia Metals | McEwen Mining vs. Blackrock World Mining | McEwen Mining vs. Hochschild Mining 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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