Correlation Between McEwen Mining and NetEase
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and NetEase 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 NetEase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and NetEase, you can compare the effects of market volatilities on McEwen Mining and NetEase 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 NetEase. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and NetEase.
Diversification Opportunities for McEwen Mining and NetEase
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between McEwen and NetEase is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and NetEase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetEase 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 NetEase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetEase has no effect on the direction of McEwen Mining i.e., McEwen Mining and NetEase go up and down completely randomly.
Pair Corralation between McEwen Mining and NetEase
If you would invest 160,718 in NetEase on September 12, 2024 and sell it today you would earn a total of 881.00 from holding NetEase or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. NetEase
Performance |
| Timeline |
| McEwen Mining |
| NetEase |
McEwen Mining and NetEase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and NetEase
The main advantage of trading using opposite McEwen Mining and NetEase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, NetEase 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 NetEase will offset losses from the drop in NetEase's 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 |
| NetEase vs. Lloyds Banking Group | NetEase vs. McEwen Mining | NetEase vs. Capital One Financial | NetEase 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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