Correlation Between MCEWEN MINING and British American
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and British American 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 British American 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 British American Tobacco, you can compare the effects of market volatilities on MCEWEN MINING and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and British American.
Diversification Opportunities for MCEWEN MINING and British American
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MCEWEN and British is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and British American go up and down completely randomly.
Pair Corralation between MCEWEN MINING and British American
Assuming the 90 days horizon MCEWEN MINING INC is expected to generate 4.07 times more return on investment than British American. However, MCEWEN MINING is 4.07 times more volatile than British American Tobacco. It trades about 0.11 of its potential returns per unit of risk. British American Tobacco is currently generating about 0.43 per unit of risk. If you would invest 795.00 in MCEWEN MINING INC on September 13, 2024 and sell it today you would earn a total of 60.00 from holding MCEWEN MINING INC or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
MCEWEN MINING INC vs. British American Tobacco
Performance |
| Timeline |
| MCEWEN MINING INC |
| British American Tobacco |
MCEWEN MINING and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and British American
The main advantage of trading using opposite MCEWEN MINING and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, British American 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 British American will offset losses from the drop in British American'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 |
| British American vs. Electronic Arts | British American vs. PKSHA TECHNOLOGY INC | British American vs. KIMBALL ELECTRONICS | British American vs. FANDIFI TECHNOLOGY P |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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