Correlation Between McEwen Mining and Merck
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Merck 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 Merck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Merck Company, you can compare the effects of market volatilities on McEwen Mining and Merck 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 Merck. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Merck.
Diversification Opportunities for McEwen Mining and Merck
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between McEwen and Merck is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Merck Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merck Company 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 Merck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merck Company has no effect on the direction of McEwen Mining i.e., McEwen Mining and Merck go up and down completely randomly.
Pair Corralation between McEwen Mining and Merck
If you would invest 19,800 in McEwen Mining on September 3, 2024 and sell it today you would earn a total of 0.00 from holding McEwen Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
McEwen Mining vs. Merck Company
Performance |
| Timeline |
| McEwen Mining |
| Merck Company |
McEwen Mining and Merck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Merck
The main advantage of trading using opposite McEwen Mining and Merck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Merck 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 Merck will offset losses from the drop in Merck's long position.| McEwen Mining vs. Glencore plc | McEwen Mining vs. Minera Frisco SAB | McEwen Mining vs. The Select Sector | McEwen Mining vs. Promotora y Operadora |
| Merck vs. UnitedHealth Group Incorporated | Merck vs. Costco Wholesale | Merck vs. First Republic Bank | Merck 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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