Correlation Between IPC MEXICO and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO and McEwen Mining 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 IPC MEXICO and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPC MEXICO and McEwen Mining, you can compare the effects of market volatilities on IPC MEXICO and McEwen Mining 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 IPC MEXICO with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and McEwen Mining.
Diversification Opportunities for IPC MEXICO and McEwen Mining
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPC and McEwen is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and IPC MEXICO 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 IPC MEXICO are associated (or correlated) with McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of IPC MEXICO i.e., IPC MEXICO and McEwen Mining go up and down completely randomly.
Pair Corralation between IPC MEXICO and McEwen Mining
Assuming the 90 days trading horizon IPC MEXICO is expected to under-perform the McEwen Mining. But the index apears to be less risky and, when comparing its historical volatility, IPC MEXICO is 7.2 times less risky than McEwen Mining. The index trades about -0.02 of its potential returns per unit of risk. The McEwen Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,500 in McEwen Mining on August 31, 2024 and sell it today you would earn a total of 12,300 from holding McEwen Mining or generate 164.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.14% |
| Values | Daily Returns |
IPC MEXICO vs. McEwen Mining
Performance |
| Timeline |
IPC MEXICO and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
McEwen Mining
Pair trading matchups for McEwen Mining
Pair Trading with IPC MEXICO and McEwen Mining
The main advantage of trading using opposite IPC MEXICO and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| IPC MEXICO vs. Genworth Financial | IPC MEXICO vs. Cognizant Technology Solutions | IPC MEXICO vs. CVS Health | IPC MEXICO vs. First Republic Bank |
| McEwen Mining vs. DXC Technology | McEwen Mining vs. Lloyds Banking Group | McEwen Mining vs. Ross Stores | McEwen Mining vs. Micron Technology |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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