Correlation Between McEwen Mining and Amazon
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Amazon 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 Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Amazon Inc, you can compare the effects of market volatilities on McEwen Mining and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Amazon.
Diversification Opportunities for McEwen Mining and Amazon
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between McEwen and Amazon is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of McEwen Mining i.e., McEwen Mining and Amazon go up and down completely randomly.
Pair Corralation between McEwen Mining and Amazon
If you would invest 369,740 in Amazon Inc on August 25, 2024 and sell it today you would earn a total of 35,551 from holding Amazon Inc or generate 9.62% 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. Amazon Inc
Performance |
| Timeline |
| McEwen Mining |
| Amazon Inc |
McEwen Mining and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Amazon
The main advantage of trading using opposite McEwen Mining and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| McEwen Mining vs. Ameriprise Financial | McEwen Mining vs. United Airlines Holdings | McEwen Mining vs. Capital One Financial | McEwen Mining vs. First Republic Bank |
| Amazon vs. Monster Beverage Corp | Amazon vs. Applied Materials | Amazon vs. Grupo Sports World | Amazon vs. Martin Marietta Materials |
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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