Correlation Between McEwen Mining and Nokia
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Nokia 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 Nokia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Nokia, you can compare the effects of market volatilities on McEwen Mining and Nokia 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 Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Nokia.
Diversification Opportunities for McEwen Mining and Nokia
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between McEwen and Nokia is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia 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 Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia has no effect on the direction of McEwen Mining i.e., McEwen Mining and Nokia go up and down completely randomly.
Pair Corralation between McEwen Mining and Nokia
Assuming the 90 days trading horizon McEwen Mining is expected to generate 2.44 times more return on investment than Nokia. However, McEwen Mining is 2.44 times more volatile than Nokia. It trades about 0.04 of its potential returns per unit of risk. Nokia is currently generating about 0.03 per unit of risk. If you would invest 7,500 in McEwen Mining on November 28, 2024 and sell it today you would earn a total of 7,048 from holding McEwen Mining or generate 93.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
McEwen Mining vs. Nokia
Performance |
| Timeline |
| McEwen Mining |
| Nokia |
McEwen Mining and Nokia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Nokia
The main advantage of trading using opposite McEwen Mining and Nokia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Nokia 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 Nokia will offset losses from the drop in Nokia'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 |
| Nokia vs. Capital One Financial | Nokia vs. Cognizant Technology Solutions | Nokia vs. Ameriprise Financial | Nokia vs. Southwest Airlines |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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