Correlation Between McEwen Mining and Perpetua Resources
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Perpetua 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 Perpetua 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 Perpetua Resources Corp, you can compare the effects of market volatilities on McEwen Mining and Perpetua 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 Perpetua Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Perpetua Resources.
Diversification Opportunities for McEwen Mining and Perpetua Resources
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between McEwen and Perpetua is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Perpetua Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perpetua Resources Corp 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 Perpetua Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perpetua Resources Corp has no effect on the direction of McEwen Mining i.e., McEwen Mining and Perpetua Resources go up and down completely randomly.
Pair Corralation between McEwen Mining and Perpetua Resources
Considering the 90-day investment horizon McEwen Mining is expected to generate 28.83 times less return on investment than Perpetua Resources. But when comparing it to its historical volatility, McEwen Mining is 2.07 times less risky than Perpetua Resources. It trades about 0.01 of its potential returns per unit of risk. Perpetua Resources Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,105 in Perpetua Resources Corp on November 3, 2024 and sell it today you would earn a total of 75.00 from holding Perpetua Resources Corp or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Perpetua Resources Corp
Performance |
| Timeline |
| McEwen Mining |
| Perpetua Resources Corp |
McEwen Mining and Perpetua Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Perpetua Resources
The main advantage of trading using opposite McEwen Mining and Perpetua Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Perpetua 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 Perpetua Resources will offset losses from the drop in Perpetua 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 |
| Perpetua Resources vs. SilverCrest Metals | Perpetua Resources vs. New Pacific Metals | Perpetua Resources vs. Endeavour Silver Corp | Perpetua Resources vs. McEwen 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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