Correlation Between McEwen Mining and International Paper
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and International Paper 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 International Paper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and International Paper, you can compare the effects of market volatilities on McEwen Mining and International Paper 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 International Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and International Paper.
Diversification Opportunities for McEwen Mining and International Paper
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between McEwen and International is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and International Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Paper 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 International Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Paper has no effect on the direction of McEwen Mining i.e., McEwen Mining and International Paper go up and down completely randomly.
Pair Corralation between McEwen Mining and International Paper
If you would invest 87,356 in International Paper on September 5, 2024 and sell it today you would earn a total of 944.00 from holding International Paper or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. International Paper
Performance |
| Timeline |
| McEwen Mining |
| International Paper |
McEwen Mining and International Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and International Paper
The main advantage of trading using opposite McEwen Mining and International Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, International Paper 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 International Paper will offset losses from the drop in International Paper's long position.| McEwen Mining vs. Costco Wholesale | McEwen Mining vs. FIBRA Storage | McEwen Mining vs. DXC Technology | McEwen Mining vs. Micron Technology |
| International Paper vs. Grupo Sports World | International Paper vs. Grupo Hotelero Santa | International Paper vs. Monster Beverage Corp | International Paper vs. Hoteles City Express |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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