Correlation Between McEwen Mining and Home Depot
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Home Depot 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 Home Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and The Home Depot, you can compare the effects of market volatilities on McEwen Mining and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Home Depot.
Diversification Opportunities for McEwen Mining and Home Depot
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between McEwen and Home is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and The Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of McEwen Mining i.e., McEwen Mining and Home Depot go up and down completely randomly.
Pair Corralation between McEwen Mining and Home Depot
Assuming the 90 days trading horizon McEwen Mining is expected to under-perform the Home Depot. In addition to that, McEwen Mining is 2.74 times more volatile than The Home Depot. It trades about -0.29 of its total potential returns per unit of risk. The Home Depot is currently generating about -0.18 per unit of volatility. If you would invest 877,300 in The Home Depot on November 28, 2024 and sell it today you would lose (57,050) from holding The Home Depot or give up 6.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. The Home Depot
Performance |
| Timeline |
| McEwen Mining |
| Home Depot |
McEwen Mining and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Home Depot
The main advantage of trading using opposite McEwen Mining and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| McEwen Mining vs. Air Transport Services | McEwen Mining vs. Delta Air Lines | McEwen Mining vs. Genworth Financial | McEwen Mining vs. Southern Copper |
| Home Depot vs. CVS Health | Home Depot vs. Deutsche Bank Aktiengesellschaft | Home Depot vs. Ameriprise Financial | Home Depot vs. Cognizant Technology Solutions |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |