Correlation Between GoGold Resources and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both GoGold Resources 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 GoGold Resources and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoGold Resources and McEwen Mining, you can compare the effects of market volatilities on GoGold Resources 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 GoGold Resources with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoGold Resources and McEwen Mining.
Diversification Opportunities for GoGold Resources and McEwen Mining
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GoGold and McEwen is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and GoGold Resources 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 GoGold Resources 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 GoGold Resources i.e., GoGold Resources and McEwen Mining go up and down completely randomly.
Pair Corralation between GoGold Resources and McEwen Mining
Assuming the 90 days horizon GoGold Resources is expected to generate 2.39 times less return on investment than McEwen Mining. In addition to that, GoGold Resources is 1.09 times more volatile than McEwen Mining. It trades about 0.01 of its total potential returns per unit of risk. McEwen Mining is currently generating about 0.03 per unit of volatility. If you would invest 723.00 in McEwen Mining on August 29, 2024 and sell it today you would earn a total of 99.00 from holding McEwen Mining or generate 13.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoGold Resources vs. McEwen Mining
Performance |
| Timeline |
| GoGold Resources |
| McEwen Mining |
GoGold Resources and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoGold Resources and McEwen Mining
The main advantage of trading using opposite GoGold Resources and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources 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.| GoGold Resources vs. Silver Hammer Mining | GoGold Resources vs. Reyna Silver Corp | GoGold Resources vs. Guanajuato Silver | GoGold Resources vs. Silver One Resources |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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