Correlation Between Northern Minerals and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Northern Minerals 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 Northern Minerals and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Minerals Exploration and McEwen Mining, you can compare the effects of market volatilities on Northern Minerals 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 Northern Minerals with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Minerals and McEwen Mining.
Diversification Opportunities for Northern Minerals and McEwen Mining
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northern and McEwen is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Northern Minerals Exploration and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Northern Minerals 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 Northern Minerals Exploration 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 Northern Minerals i.e., Northern Minerals and McEwen Mining go up and down completely randomly.
Pair Corralation between Northern Minerals and McEwen Mining
Given the investment horizon of 90 days Northern Minerals Exploration is expected to generate 12.69 times more return on investment than McEwen Mining. However, Northern Minerals is 12.69 times more volatile than McEwen Mining. It trades about 0.14 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.38 per unit of risk. 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 |
Northern Minerals Exploration vs. McEwen Mining
Performance |
| Timeline |
| Northern Minerals |
| McEwen Mining |
Northern Minerals and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Minerals and McEwen Mining
The main advantage of trading using opposite Northern Minerals and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Minerals 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.| Northern Minerals vs. Petroleo Brasileiro Petrobras | Northern Minerals vs. Equinor ASA ADR | Northern Minerals vs. Eni SpA ADR | Northern Minerals vs. YPF Sociedad Anonima |
| McEwen Mining vs. Endeavour Silver Corp | McEwen Mining vs. Fortuna Silver Mines | McEwen Mining vs. New Gold | McEwen Mining vs. Sandstorm Gold Ltd |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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