Correlation Between International Consolidated and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both International Consolidated 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 International Consolidated and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and McEwen Mining, you can compare the effects of market volatilities on International Consolidated 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 International Consolidated with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and McEwen Mining.
Diversification Opportunities for International Consolidated and McEwen Mining
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and McEwen is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and International Consolidated 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 International Consolidated Airlines 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 International Consolidated i.e., International Consolidated and McEwen Mining go up and down completely randomly.
Pair Corralation between International Consolidated and McEwen Mining
Assuming the 90 days trading horizon International Consolidated Airlines is expected to generate 0.53 times more return on investment than McEwen Mining. However, International Consolidated Airlines is 1.89 times less risky than McEwen Mining. It trades about 0.12 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.03 per unit of risk. If you would invest 15,555 in International Consolidated Airlines on September 2, 2024 and sell it today you would earn a total of 10,525 from holding International Consolidated Airlines or generate 67.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
International Consolidated Air vs. McEwen Mining
Performance |
| Timeline |
| International Consolidated |
| McEwen Mining |
International Consolidated and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and McEwen Mining
The main advantage of trading using opposite International Consolidated and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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.| International Consolidated vs. Samsung Electronics Co | International Consolidated vs. Samsung Electronics Co | International Consolidated vs. Hyundai Motor | International Consolidated vs. Toyota Motor Corp |
| 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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