Correlation Between MTI WIRELESS and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both MTI WIRELESS 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 MTI WIRELESS and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTI WIRELESS EDGE and MCEWEN MINING INC, you can compare the effects of market volatilities on MTI WIRELESS 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 MTI WIRELESS with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI WIRELESS and MCEWEN MINING.
Diversification Opportunities for MTI WIRELESS and MCEWEN MINING
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MTI and MCEWEN is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding MTI WIRELESS EDGE 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 MTI WIRELESS 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 MTI WIRELESS EDGE 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 MTI WIRELESS i.e., MTI WIRELESS and MCEWEN MINING go up and down completely randomly.
Pair Corralation between MTI WIRELESS and MCEWEN MINING
Assuming the 90 days horizon MTI WIRELESS EDGE is expected to under-perform the MCEWEN MINING. But the stock apears to be less risky and, when comparing its historical volatility, MTI WIRELESS EDGE is 1.56 times less risky than MCEWEN MINING. The stock trades about -0.21 of its potential returns per unit of risk. The MCEWEN MINING INC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 755.00 in MCEWEN MINING INC on September 12, 2024 and sell it today you would earn a total of 60.00 from holding MCEWEN MINING INC or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTI WIRELESS EDGE vs. MCEWEN MINING INC
Performance |
| Timeline |
| MTI WIRELESS EDGE |
| MCEWEN MINING INC |
MTI WIRELESS and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTI WIRELESS and MCEWEN MINING
The main advantage of trading using opposite MTI WIRELESS and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI WIRELESS 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.| MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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