Correlation Between McEwen Mining and First Solar
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and First Solar 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 First Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and First Solar, you can compare the effects of market volatilities on McEwen Mining and First Solar 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 First Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and First Solar.
Diversification Opportunities for McEwen Mining and First Solar
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between McEwen and First is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar 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 First Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Solar has no effect on the direction of McEwen Mining i.e., McEwen Mining and First Solar go up and down completely randomly.
Pair Corralation between McEwen Mining and First Solar
If you would invest 392,500 in First Solar on September 12, 2024 and sell it today you would earn a total of 12,400 from holding First Solar or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
McEwen Mining vs. First Solar
Performance |
| Timeline |
| McEwen Mining |
| First Solar |
McEwen Mining and First Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and First Solar
The main advantage of trading using opposite McEwen Mining and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, First Solar 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 First Solar will offset losses from the drop in First Solar's long position.| McEwen Mining vs. Compaa Minera Autln | McEwen Mining vs. The Select Sector | McEwen Mining vs. Promotora y Operadora | McEwen Mining vs. iShares Global Timber |
| First Solar vs. Prudential Financial | First Solar vs. Verizon Communications | First Solar vs. Monster Beverage Corp | First Solar vs. McEwen Mining |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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