Correlation Between McEwen Mining and Ross Stores
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Ross Stores 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 Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Ross Stores, you can compare the effects of market volatilities on McEwen Mining and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Ross Stores.
Diversification Opportunities for McEwen Mining and Ross Stores
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between McEwen and Ross is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of McEwen Mining i.e., McEwen Mining and Ross Stores go up and down completely randomly.
Pair Corralation between McEwen Mining and Ross Stores
Assuming the 90 days trading horizon McEwen Mining is expected to generate 2.5 times more return on investment than Ross Stores. However, McEwen Mining is 2.5 times more volatile than Ross Stores. It trades about 0.06 of its potential returns per unit of risk. Ross Stores is currently generating about 0.15 per unit of risk. If you would invest 7,500 in McEwen Mining on August 26, 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 | Strong |
| Accuracy | 34.85% |
| Values | Daily Returns |
McEwen Mining vs. Ross Stores
Performance |
| Timeline |
| McEwen Mining |
| Ross Stores |
McEwen Mining and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Ross Stores
The main advantage of trading using opposite McEwen Mining and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| McEwen Mining vs. Ameriprise Financial | McEwen Mining vs. United Airlines Holdings | McEwen Mining vs. Capital One Financial | McEwen Mining vs. First Republic Bank |
| Ross Stores vs. Glencore plc | Ross Stores vs. iShares Trust | Ross Stores vs. US Bancorp | Ross Stores vs. American Express |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |