Correlation Between McEwen Mining and New Pacific
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and New Pacific 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 New Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and New Pacific Metals, you can compare the effects of market volatilities on McEwen Mining and New Pacific 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 New Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and New Pacific.
Diversification Opportunities for McEwen Mining and New Pacific
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McEwen and New is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and New Pacific Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Pacific Metals 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 New Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Pacific Metals has no effect on the direction of McEwen Mining i.e., McEwen Mining and New Pacific go up and down completely randomly.
Pair Corralation between McEwen Mining and New Pacific
Considering the 90-day investment horizon McEwen Mining is expected to generate 0.78 times more return on investment than New Pacific. However, McEwen Mining is 1.28 times less risky than New Pacific. It trades about 0.05 of its potential returns per unit of risk. New Pacific Metals is currently generating about 0.0 per unit of risk. If you would invest 656.00 in McEwen Mining on November 9, 2024 and sell it today you would earn a total of 209.00 from holding McEwen Mining or generate 31.86% 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. New Pacific Metals
Performance |
| Timeline |
| McEwen Mining |
| New Pacific Metals |
McEwen Mining and New Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and New Pacific
The main advantage of trading using opposite McEwen Mining and New Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, New Pacific 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 New Pacific will offset losses from the drop in New Pacific's 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 |
| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific vs. SilverCrest Metals |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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