Correlation Between MCEWEN MINING and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and Scandinavian Tobacco 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 MCEWEN MINING and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCEWEN MINING INC and Scandinavian Tobacco Group, you can compare the effects of market volatilities on MCEWEN MINING and Scandinavian Tobacco 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 MCEWEN MINING with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and Scandinavian Tobacco.
Diversification Opportunities for MCEWEN MINING and Scandinavian Tobacco
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MCEWEN and Scandinavian is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and MCEWEN MINING 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 MCEWEN MINING INC are associated (or correlated) with Scandinavian Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Tobacco has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between MCEWEN MINING and Scandinavian Tobacco
Assuming the 90 days horizon MCEWEN MINING is expected to generate 2.12 times less return on investment than Scandinavian Tobacco. But when comparing it to its historical volatility, MCEWEN MINING INC is 1.44 times less risky than Scandinavian Tobacco. It trades about 0.04 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 442.00 in Scandinavian Tobacco Group on September 13, 2024 and sell it today you would earn a total of 828.00 from holding Scandinavian Tobacco Group or generate 187.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCEWEN MINING INC vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| MCEWEN MINING INC |
| Scandinavian Tobacco |
MCEWEN MINING and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and Scandinavian Tobacco
The main advantage of trading using opposite MCEWEN MINING and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, Scandinavian Tobacco 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 Scandinavian Tobacco will offset losses from the drop in Scandinavian Tobacco's long position.| MCEWEN MINING vs. NEW PACIFIC METALS | MCEWEN MINING vs. Superior Plus Corp | MCEWEN MINING vs. SIVERS SEMICONDUCTORS AB | MCEWEN MINING vs. Norsk Hydro ASA |
| Scandinavian Tobacco vs. HomeToGo SE | Scandinavian Tobacco vs. Gruppo Mutuionline SpA | Scandinavian Tobacco vs. SIEM OFFSHORE NEW | Scandinavian Tobacco vs. Taylor Morrison Home |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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