Correlation Between McEwen Mining and Vale SA
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Vale SA 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 Vale SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Vale SA, you can compare the effects of market volatilities on McEwen Mining and Vale SA 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 Vale SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Vale SA.
Diversification Opportunities for McEwen Mining and Vale SA
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between McEwen and Vale is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Vale SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale SA 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 Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA has no effect on the direction of McEwen Mining i.e., McEwen Mining and Vale SA go up and down completely randomly.
Pair Corralation between McEwen Mining and Vale SA
If you would invest 19,800 in McEwen Mining on August 29, 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Vale SA
Performance |
| Timeline |
| McEwen Mining |
| Vale SA |
McEwen Mining and Vale SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Vale SA
The main advantage of trading using opposite McEwen Mining and Vale SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Vale SA 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 Vale SA will offset losses from the drop in Vale SA's long position.| McEwen Mining vs. The Select Sector | McEwen Mining vs. SPDR Series Trust | McEwen Mining vs. FibroGen | McEwen Mining vs. iShares Trust |
| Vale SA vs. Monster Beverage Corp | Vale SA vs. Deutsche Bank Aktiengesellschaft | Vale SA vs. GMxico Transportes SAB | Vale SA vs. Cognizant Technology Solutions |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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