Correlation Between McEwen Mining and Las Vegas
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Las Vegas 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 Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Las Vegas Sands, you can compare the effects of market volatilities on McEwen Mining and Las Vegas 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 Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Las Vegas.
Diversification Opportunities for McEwen Mining and Las Vegas
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between McEwen and Las is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands 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 Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of McEwen Mining i.e., McEwen Mining and Las Vegas go up and down completely randomly.
Pair Corralation between McEwen Mining and Las Vegas
Assuming the 90 days trading horizon McEwen Mining is expected to generate 3.29 times more return on investment than Las Vegas. However, McEwen Mining is 3.29 times more volatile than Las Vegas Sands. It trades about 0.06 of its potential returns per unit of risk. Las Vegas Sands is currently generating about 0.03 per unit of risk. If you would invest 7,500 in McEwen Mining on September 14, 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 Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Las Vegas Sands
Performance |
| Timeline |
| McEwen Mining |
| Las Vegas Sands |
McEwen Mining and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Las Vegas
The main advantage of trading using opposite McEwen Mining and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' 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 |
| Las Vegas vs. Verizon Communications | Las Vegas vs. Grupo Carso SAB | Las Vegas vs. McEwen Mining | Las Vegas vs. DXC Technology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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