Correlation Between McEwen Mining and Lennar
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Lennar 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 Lennar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Lennar, you can compare the effects of market volatilities on McEwen Mining and Lennar 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 Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Lennar.
Diversification Opportunities for McEwen Mining and Lennar
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between McEwen and Lennar is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar 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 Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of McEwen Mining i.e., McEwen Mining and Lennar go up and down completely randomly.
Pair Corralation between McEwen Mining and Lennar
Assuming the 90 days trading horizon McEwen Mining is expected to generate 4.99 times more return on investment than Lennar. However, McEwen Mining is 4.99 times more volatile than Lennar. It trades about 0.1 of its potential returns per unit of risk. Lennar is currently generating about 0.12 per unit of risk. If you would invest 7,500 in McEwen Mining on August 31, 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 | 99.21% |
| Values | Daily Returns |
McEwen Mining vs. Lennar
Performance |
| Timeline |
| McEwen Mining |
| Lennar |
McEwen Mining and Lennar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Lennar
The main advantage of trading using opposite McEwen Mining and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar's long position.| McEwen Mining vs. DXC Technology | McEwen Mining vs. Lloyds Banking Group | McEwen Mining vs. Ross Stores | McEwen Mining vs. Micron Technology |
| Lennar vs. FibraHotel | Lennar vs. Delta Air Lines | Lennar vs. Prudential Financial | Lennar 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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