Correlation Between ETFS Coffee and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee 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 ETFS Coffee and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Coffee ETC and MCEWEN MINING INC, you can compare the effects of market volatilities on ETFS Coffee 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 ETFS Coffee with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and MCEWEN MINING.
Diversification Opportunities for ETFS Coffee and MCEWEN MINING
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ETFS and MCEWEN is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC and ETFS Coffee 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 ETFS Coffee ETC 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 INC has no effect on the direction of ETFS Coffee i.e., ETFS Coffee and MCEWEN MINING go up and down completely randomly.
Pair Corralation between ETFS Coffee and MCEWEN MINING
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 0.76 times more return on investment than MCEWEN MINING. However, ETFS Coffee ETC is 1.32 times less risky than MCEWEN MINING. It trades about 0.22 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about 0.01 per unit of risk. If you would invest 3,600 in ETFS Coffee ETC on November 2, 2024 and sell it today you would earn a total of 2,383 from holding ETFS Coffee ETC or generate 66.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.09% |
| Values | Daily Returns |
ETFS Coffee ETC vs. MCEWEN MINING INC
Performance |
| Timeline |
| ETFS Coffee ETC |
| MCEWEN MINING INC |
ETFS Coffee and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and MCEWEN MINING
The main advantage of trading using opposite ETFS Coffee and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee 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.| ETFS Coffee vs. QBE Insurance Group | ETFS Coffee vs. Molson Coors Beverage | ETFS Coffee vs. Urban Outfitters | ETFS Coffee vs. China Resources Beer |
| MCEWEN MINING vs. Telecom Argentina SA | MCEWEN MINING vs. Cairo Communication SpA | MCEWEN MINING vs. Spirent Communications plc | MCEWEN MINING vs. MidCap Financial Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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