Correlation Between Triple Flag and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Triple Flag 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 Triple Flag and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triple Flag Precious and McEwen Mining, you can compare the effects of market volatilities on Triple Flag 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 Triple Flag with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple Flag and McEwen Mining.
Diversification Opportunities for Triple Flag and McEwen Mining
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Triple and McEwen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Triple Flag 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 Triple Flag Precious 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 Triple Flag i.e., Triple Flag and McEwen Mining go up and down completely randomly.
Pair Corralation between Triple Flag and McEwen Mining
Given the investment horizon of 90 days Triple Flag Precious is expected to generate 0.56 times more return on investment than McEwen Mining. However, Triple Flag Precious is 1.8 times less risky than McEwen Mining. It trades about -0.22 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.38 per unit of risk. If you would invest 1,774 in Triple Flag Precious on August 27, 2024 and sell it today you would lose (126.00) from holding Triple Flag Precious or give up 7.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triple Flag Precious vs. McEwen Mining
Performance |
| Timeline |
| Triple Flag Precious |
| McEwen Mining |
Triple Flag and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triple Flag and McEwen Mining
The main advantage of trading using opposite Triple Flag and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple Flag 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.| Triple Flag vs. Metalla Royalty Streaming | Triple Flag vs. Endeavour Silver Corp | Triple Flag vs. SilverCrest Metals | Triple Flag vs. Gatos Silver |
| McEwen Mining vs. Gold Royalty Corp | McEwen Mining vs. SilverCrest Metals | McEwen Mining vs. Hecla Mining | McEwen Mining vs. Avino Silver Gold |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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