Correlation Between McEwen Mining and Abbott Laboratories
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Abbott Laboratories 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 McEwen Mining and Abbott Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Abbott Laboratories, you can compare the effects of market volatilities on McEwen Mining and Abbott Laboratories 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 McEwen Mining with a short position of Abbott Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Abbott Laboratories.
Diversification Opportunities for McEwen Mining and Abbott Laboratories
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between McEwen and Abbott is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories and McEwen Mining 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 McEwen Mining are associated (or correlated) with Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of McEwen Mining i.e., McEwen Mining and Abbott Laboratories go up and down completely randomly.
Pair Corralation between McEwen Mining and Abbott Laboratories
Assuming the 90 days trading horizon McEwen Mining is expected to generate 6.34 times more return on investment than Abbott Laboratories. However, McEwen Mining is 6.34 times more volatile than Abbott Laboratories. It trades about 0.1 of its potential returns per unit of risk. Abbott Laboratories is currently generating about 0.15 per unit of risk. If you would invest 7,500 in McEwen Mining on September 2, 2024 and sell it today you would earn a total of 12,300 from holding McEwen Mining or generate 164.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Abbott Laboratories
Performance |
| Timeline |
| McEwen Mining |
| Abbott Laboratories |
McEwen Mining and Abbott Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Abbott Laboratories
The main advantage of trading using opposite McEwen Mining and Abbott Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Abbott Laboratories 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 Abbott Laboratories will offset losses from the drop in Abbott Laboratories' long position.| McEwen Mining vs. Prudential Financial | McEwen Mining vs. FIBRA Storage | McEwen Mining vs. Ameriprise Financial | McEwen Mining vs. KB Home |
| Abbott Laboratories vs. Grupo Sports World | Abbott Laboratories vs. Hoteles City Express | Abbott Laboratories vs. United Airlines Holdings | Abbott Laboratories vs. Ameriprise Financial |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |