Correlation Between McEwen Mining and Gatos Silver
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Gatos Silver 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 Gatos Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Gatos Silver, you can compare the effects of market volatilities on McEwen Mining and Gatos Silver 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 Gatos Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Gatos Silver.
Diversification Opportunities for McEwen Mining and Gatos Silver
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McEwen and Gatos is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver 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 Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of McEwen Mining i.e., McEwen Mining and Gatos Silver go up and down completely randomly.
Pair Corralation between McEwen Mining and Gatos Silver
Considering the 90-day investment horizon McEwen Mining is expected to generate 0.89 times more return on investment than Gatos Silver. However, McEwen Mining is 1.12 times less risky than Gatos Silver. It trades about -0.38 of its potential returns per unit of risk. Gatos Silver is currently generating about -0.34 per unit of risk. If you would invest 1,030 in McEwen Mining on August 27, 2024 and sell it today you would lose (209.00) from holding McEwen Mining or give up 20.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Gatos Silver
Performance |
| Timeline |
| McEwen Mining |
| Gatos Silver |
McEwen Mining and Gatos Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Gatos Silver
The main advantage of trading using opposite McEwen Mining and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Gatos Silver 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 Gatos Silver will offset losses from the drop in Gatos Silver's long position.| McEwen Mining vs. Gold Royalty Corp | McEwen Mining vs. SilverCrest Metals | McEwen Mining vs. Hecla Mining | McEwen Mining vs. Avino Silver Gold |
| Gatos Silver vs. Endeavour Silver Corp | Gatos Silver vs. Metalla Royalty Streaming | Gatos Silver vs. New Pacific Metals | Gatos Silver vs. Hecla Mining |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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