Correlation Between KENNAMETAL INC and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both KENNAMETAL INC 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 KENNAMETAL INC and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENNAMETAL INC and MCEWEN MINING INC, you can compare the effects of market volatilities on KENNAMETAL INC 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 KENNAMETAL INC with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENNAMETAL INC and MCEWEN MINING.
Diversification Opportunities for KENNAMETAL INC and MCEWEN MINING
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KENNAMETAL and MCEWEN is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding KENNAMETAL INC and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC and KENNAMETAL INC 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 KENNAMETAL INC 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 INC has no effect on the direction of KENNAMETAL INC i.e., KENNAMETAL INC and MCEWEN MINING go up and down completely randomly.
Pair Corralation between KENNAMETAL INC and MCEWEN MINING
Assuming the 90 days trading horizon KENNAMETAL INC is expected to generate 2.79 times less return on investment than MCEWEN MINING. But when comparing it to its historical volatility, KENNAMETAL INC is 2.03 times less risky than MCEWEN MINING. It trades about 0.02 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 735.00 in MCEWEN MINING INC on August 31, 2024 and sell it today you would earn a total of 40.00 from holding MCEWEN MINING INC or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
KENNAMETAL INC vs. MCEWEN MINING INC
Performance |
| Timeline |
| KENNAMETAL INC |
| MCEWEN MINING INC |
KENNAMETAL INC and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENNAMETAL INC and MCEWEN MINING
The main advantage of trading using opposite KENNAMETAL INC and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENNAMETAL INC 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.| KENNAMETAL INC vs. Siamgas And Petrochemicals | KENNAMETAL INC vs. CVS Health | KENNAMETAL INC vs. AIR PRODCHEMICALS | KENNAMETAL INC vs. RYU Apparel |
| MCEWEN MINING vs. BLUESCOPE STEEL | MCEWEN MINING vs. MEDICAL FACILITIES NEW | MCEWEN MINING vs. IMAGIN MEDICAL INC | MCEWEN MINING vs. Avanos Medical |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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