Correlation Between McEwen Mining and Northern Minerals
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Northern Minerals 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 Northern Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Northern Minerals Exploration, you can compare the effects of market volatilities on McEwen Mining and Northern Minerals 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 Northern Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Northern Minerals.
Diversification Opportunities for McEwen Mining and Northern Minerals
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between McEwen and Northern is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Northern Minerals Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Minerals 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 Northern Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Minerals has no effect on the direction of McEwen Mining i.e., McEwen Mining and Northern Minerals go up and down completely randomly.
Pair Corralation between McEwen Mining and Northern Minerals
Considering the 90-day investment horizon McEwen Mining is expected to under-perform the Northern Minerals. But the stock apears to be less risky and, when comparing its historical volatility, McEwen Mining is 12.69 times less risky than Northern Minerals. The stock trades about -0.38 of its potential returns per unit of risk. The Northern Minerals Exploration is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Northern Minerals Exploration on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Northern Minerals Exploration or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
McEwen Mining vs. Northern Minerals Exploration
Performance |
| Timeline |
| McEwen Mining |
| Northern Minerals |
McEwen Mining and Northern Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Northern Minerals
The main advantage of trading using opposite McEwen Mining and Northern Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Northern Minerals 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 Northern Minerals will offset losses from the drop in Northern Minerals' 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 |
| Northern Minerals vs. Petroleo Brasileiro Petrobras | Northern Minerals vs. Equinor ASA ADR | Northern Minerals vs. Eni SpA ADR | Northern Minerals vs. YPF Sociedad Anonima |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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