Correlation Between Neometals and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Neometals 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 Neometals and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neometals and McEwen Mining, you can compare the effects of market volatilities on Neometals 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 Neometals with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neometals and McEwen Mining.
Diversification Opportunities for Neometals and McEwen Mining
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Neometals and McEwen is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Neometals and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Neometals 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 Neometals 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 Neometals i.e., Neometals and McEwen Mining go up and down completely randomly.
Pair Corralation between Neometals and McEwen Mining
Assuming the 90 days trading horizon Neometals is expected to generate 1.56 times more return on investment than McEwen Mining. However, Neometals is 1.56 times more volatile than McEwen Mining. It trades about -0.02 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.03 per unit of risk. If you would invest 550.00 in Neometals on August 31, 2024 and sell it today you would lose (75.00) from holding Neometals or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neometals vs. McEwen Mining
Performance |
| Timeline |
| Neometals |
| McEwen Mining |
Neometals and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neometals and McEwen Mining
The main advantage of trading using opposite Neometals and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neometals 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.| Neometals vs. Live Nation Entertainment | Neometals vs. Dalata Hotel Group | Neometals vs. Intermediate Capital Group | Neometals vs. Flutter Entertainment PLC |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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