Correlation Between McEwen Mining and Vitro SAB
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Vitro SAB 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 Vitro SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Vitro SAB de, you can compare the effects of market volatilities on McEwen Mining and Vitro SAB 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 Vitro SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Vitro SAB.
Diversification Opportunities for McEwen Mining and Vitro SAB
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between McEwen and Vitro is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Vitro SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitro SAB de 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 Vitro SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitro SAB de has no effect on the direction of McEwen Mining i.e., McEwen Mining and Vitro SAB go up and down completely randomly.
Pair Corralation between McEwen Mining and Vitro SAB
Assuming the 90 days trading horizon McEwen Mining is expected to generate 2.87 times more return on investment than Vitro SAB. However, McEwen Mining is 2.87 times more volatile than Vitro SAB de. It trades about 0.07 of its potential returns per unit of risk. Vitro SAB de is currently generating about -0.16 per unit of risk. If you would invest 7,500 in McEwen Mining on September 4, 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 | Very Weak |
| Accuracy | 93.47% |
| Values | Daily Returns |
McEwen Mining vs. Vitro SAB de
Performance |
| Timeline |
| McEwen Mining |
| Vitro SAB de |
McEwen Mining and Vitro SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Vitro SAB
The main advantage of trading using opposite McEwen Mining and Vitro SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Vitro SAB 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 Vitro SAB will offset losses from the drop in Vitro SAB's long position.| McEwen Mining vs. Cognizant Technology Solutions | McEwen Mining vs. Costco Wholesale | McEwen Mining vs. Verizon Communications | McEwen Mining vs. Micron Technology |
| Vitro SAB vs. Cognizant Technology Solutions | Vitro SAB vs. Monster Beverage Corp | Vitro SAB vs. Micron Technology | Vitro SAB vs. First Majestic Silver |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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