Correlation Between McEwen Mining and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Ameriprise Financial 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 Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Ameriprise Financial, you can compare the effects of market volatilities on McEwen Mining and Ameriprise Financial 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 Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Ameriprise Financial.
Diversification Opportunities for McEwen Mining and Ameriprise Financial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McEwen and Ameriprise is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial 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 Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of McEwen Mining i.e., McEwen Mining and Ameriprise Financial go up and down completely randomly.
Pair Corralation between McEwen Mining and Ameriprise Financial
If you would invest 928,741 in Ameriprise Financial on August 28, 2024 and sell it today you would earn a total of 229,412 from holding Ameriprise Financial or generate 24.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Ameriprise Financial
Performance |
| Timeline |
| McEwen Mining |
| Ameriprise Financial |
McEwen Mining and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Ameriprise Financial
The main advantage of trading using opposite McEwen Mining and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Ameriprise Financial 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.The idea behind McEwen Mining and Ameriprise Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ameriprise Financial vs. Southwest Airlines | Ameriprise Financial vs. Deutsche Bank Aktiengesellschaft | Ameriprise Financial vs. Genworth Financial | Ameriprise Financial vs. New Oriental Education |
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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