Correlation Between Impax Environmental and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Impax Environmental 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 Impax Environmental and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and McEwen Mining, you can compare the effects of market volatilities on Impax Environmental 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 Impax Environmental with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and McEwen Mining.
Diversification Opportunities for Impax Environmental and McEwen Mining
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Impax and McEwen is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Impax Environmental 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 Impax Environmental Markets 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 Impax Environmental i.e., Impax Environmental and McEwen Mining go up and down completely randomly.
Pair Corralation between Impax Environmental and McEwen Mining
Assuming the 90 days trading horizon Impax Environmental Markets is expected to under-perform the McEwen Mining. But the stock apears to be less risky and, when comparing its historical volatility, Impax Environmental Markets is 3.8 times less risky than McEwen Mining. The stock trades about -0.02 of its potential returns per unit of risk. The McEwen Mining is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 906.00 in McEwen Mining on September 12, 2024 and sell it today you would lose (41.00) from holding McEwen Mining or give up 4.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.89% |
| Values | Daily Returns |
Impax Environmental Markets vs. McEwen Mining
Performance |
| Timeline |
| Impax Environmental |
| McEwen Mining |
Impax Environmental and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and McEwen Mining
The main advantage of trading using opposite Impax Environmental and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental 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.| Impax Environmental vs. Samsung Electronics Co | Impax Environmental vs. Samsung Electronics Co | Impax Environmental vs. Hyundai Motor | Impax Environmental vs. Toyota Motor Corp |
| McEwen Mining vs. Impax Environmental Markets | McEwen Mining vs. Amedeo Air Four | McEwen Mining vs. Sealed Air Corp | McEwen Mining vs. Flow Traders NV |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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