Correlation Between McEwen Mining and GoGold Resources
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and GoGold Resources 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 GoGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and GoGold Resources, you can compare the effects of market volatilities on McEwen Mining and GoGold Resources 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 GoGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and GoGold Resources.
Diversification Opportunities for McEwen Mining and GoGold Resources
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McEwen and GoGold is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and GoGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoGold Resources 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 GoGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoGold Resources has no effect on the direction of McEwen Mining i.e., McEwen Mining and GoGold Resources go up and down completely randomly.
Pair Corralation between McEwen Mining and GoGold Resources
Considering the 90-day investment horizon McEwen Mining is expected to generate 0.95 times more return on investment than GoGold Resources. However, McEwen Mining is 1.05 times less risky than GoGold Resources. It trades about 0.04 of its potential returns per unit of risk. GoGold Resources is currently generating about 0.0 per unit of risk. If you would invest 537.00 in McEwen Mining on August 26, 2024 and sell it today you would earn a total of 301.00 from holding McEwen Mining or generate 56.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. GoGold Resources
Performance |
| Timeline |
| McEwen Mining |
| GoGold Resources |
McEwen Mining and GoGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and GoGold Resources
The main advantage of trading using opposite McEwen Mining and GoGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, GoGold Resources 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 GoGold Resources will offset losses from the drop in GoGold Resources' long position.| McEwen Mining vs. Endeavour Silver Corp | McEwen Mining vs. Fortuna Silver Mines | McEwen Mining vs. New Gold | McEwen Mining vs. Sandstorm Gold Ltd |
| GoGold Resources vs. Ascendant Resources | GoGold Resources vs. Cantex Mine Development | GoGold Resources vs. Amarc Resources | GoGold Resources vs. Sterling Metals Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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