Correlation Between STMicroelectronics and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics 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 STMicroelectronics and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and MCEWEN MINING INC, you can compare the effects of market volatilities on STMicroelectronics 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 STMicroelectronics with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and MCEWEN MINING.
Diversification Opportunities for STMicroelectronics and MCEWEN MINING
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between STMicroelectronics and MCEWEN is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV 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 STMicroelectronics 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 STMicroelectronics NV 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 STMicroelectronics i.e., STMicroelectronics and MCEWEN MINING go up and down completely randomly.
Pair Corralation between STMicroelectronics and MCEWEN MINING
Assuming the 90 days horizon STMicroelectronics NV is expected to under-perform the MCEWEN MINING. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV is 1.31 times less risky than MCEWEN MINING. The stock trades about -0.15 of its potential returns per unit of risk. The MCEWEN MINING INC is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,020 in MCEWEN MINING INC on September 3, 2024 and sell it today you would lose (235.00) from holding MCEWEN MINING INC or give up 23.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. MCEWEN MINING INC
Performance |
| Timeline |
| STMicroelectronics |
| MCEWEN MINING INC |
STMicroelectronics and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and MCEWEN MINING
The main advantage of trading using opposite STMicroelectronics and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics 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.| STMicroelectronics vs. Align Technology | STMicroelectronics vs. Micron Technology | STMicroelectronics vs. Fukuyama Transporting Co | STMicroelectronics vs. FANDIFI TECHNOLOGY P |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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