Correlation Between McEwen Mining and FedEx
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and FedEx 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 FedEx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and FedEx, you can compare the effects of market volatilities on McEwen Mining and FedEx 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 FedEx. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and FedEx.
Diversification Opportunities for McEwen Mining and FedEx
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between McEwen and FedEx is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx 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 FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of McEwen Mining i.e., McEwen Mining and FedEx go up and down completely randomly.
Pair Corralation between McEwen Mining and FedEx
Assuming the 90 days trading horizon McEwen Mining is expected to generate 4.41 times more return on investment than FedEx. However, McEwen Mining is 4.41 times more volatile than FedEx. It trades about 0.1 of its potential returns per unit of risk. FedEx is currently generating about 0.12 per unit of risk. If you would invest 7,500 in McEwen Mining on September 1, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. FedEx
Performance |
| Timeline |
| McEwen Mining |
| FedEx |
McEwen Mining and FedEx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and FedEx
The main advantage of trading using opposite McEwen Mining and FedEx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, FedEx 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 FedEx will offset losses from the drop in FedEx's long position.| McEwen Mining vs. Prudential Financial | McEwen Mining vs. Lloyds Banking Group | McEwen Mining vs. Capital One Financial | McEwen Mining vs. Applied Materials |
| FedEx vs. Genworth Financial | FedEx vs. Grupo Sports World | FedEx vs. Capital One Financial | FedEx vs. Monster Beverage Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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