Correlation Between Monks Investment and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Monks Investment 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 Monks Investment and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monks Investment Trust and McEwen Mining, you can compare the effects of market volatilities on Monks Investment 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 Monks Investment with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and McEwen Mining.
Diversification Opportunities for Monks Investment and McEwen Mining
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Monks and McEwen is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Monks Investment 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 Monks Investment Trust 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 Monks Investment i.e., Monks Investment and McEwen Mining go up and down completely randomly.
Pair Corralation between Monks Investment and McEwen Mining
Assuming the 90 days trading horizon Monks Investment is expected to generate 7.25 times less return on investment than McEwen Mining. But when comparing it to its historical volatility, Monks Investment Trust is 4.0 times less risky than McEwen Mining. It trades about 0.09 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 810.00 in McEwen Mining on September 13, 2024 and sell it today you would earn a total of 93.00 from holding McEwen Mining or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monks Investment Trust vs. McEwen Mining
Performance |
| Timeline |
| Monks Investment Trust |
| McEwen Mining |
Monks Investment and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and McEwen Mining
The main advantage of trading using opposite Monks Investment and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment 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.| Monks Investment vs. Catalyst Media Group | Monks Investment vs. CATLIN GROUP | Monks Investment vs. Tamburi Investment Partners | Monks Investment vs. Magnora ASA |
| McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Hyundai Motor | McEwen Mining vs. Reliance Industries 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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