Correlation Between McEwen Mining and Metalla Royalty
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Metalla Royalty 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 Metalla Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Metalla Royalty Streaming, you can compare the effects of market volatilities on McEwen Mining and Metalla Royalty 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 Metalla Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Metalla Royalty.
Diversification Opportunities for McEwen Mining and Metalla Royalty
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McEwen and Metalla is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Metalla Royalty Streaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalla Royalty Streaming 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 Metalla Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalla Royalty Streaming has no effect on the direction of McEwen Mining i.e., McEwen Mining and Metalla Royalty go up and down completely randomly.
Pair Corralation between McEwen Mining and Metalla Royalty
Considering the 90-day investment horizon McEwen Mining is expected to under-perform the Metalla Royalty. But the stock apears to be less risky and, when comparing its historical volatility, McEwen Mining is 1.41 times less risky than Metalla Royalty. The stock trades about -0.38 of its potential returns per unit of risk. The Metalla Royalty Streaming is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest 379.00 in Metalla Royalty Streaming on August 27, 2024 and sell it today you would lose (75.00) from holding Metalla Royalty Streaming or give up 19.79% 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. Metalla Royalty Streaming
Performance |
| Timeline |
| McEwen Mining |
| Metalla Royalty Streaming |
McEwen Mining and Metalla Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Metalla Royalty
The main advantage of trading using opposite McEwen Mining and Metalla Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Metalla Royalty 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 Metalla Royalty will offset losses from the drop in Metalla Royalty'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 |
| Metalla Royalty vs. Triple Flag Precious | Metalla Royalty vs. Endeavour Silver Corp | Metalla Royalty vs. SilverCrest Metals | Metalla Royalty vs. Gatos 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 Stocks Directory module to find actively traded stocks across global markets.
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