Correlation Between Target and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Target 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 Target and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target and McEwen Mining, you can compare the effects of market volatilities on Target 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 Target with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and McEwen Mining.
Diversification Opportunities for Target and McEwen Mining
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Target and McEwen is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Target and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Target 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 Target 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 Target i.e., Target and McEwen Mining go up and down completely randomly.
Pair Corralation between Target and McEwen Mining
If you would invest 19,800 in McEwen Mining on August 31, 2024 and sell it today you would earn a total of 0.00 from holding McEwen Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target vs. McEwen Mining
Performance |
| Timeline |
| Target |
| McEwen Mining |
Target and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and McEwen Mining
The main advantage of trading using opposite Target and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target 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.| Target vs. McEwen Mining | Target vs. FibraHotel | Target vs. Capital One Financial | Target vs. Hoteles City Express |
| McEwen Mining vs. DXC Technology | McEwen Mining vs. Lloyds Banking Group | McEwen Mining vs. Ross Stores | McEwen Mining vs. Micron Technology |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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