Correlation Between MCEWEN MINING and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and Commonwealth Bank 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 Commonwealth Bank 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 Commonwealth Bank of, you can compare the effects of market volatilities on MCEWEN MINING and Commonwealth Bank 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 Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and Commonwealth Bank.
Diversification Opportunities for MCEWEN MINING and Commonwealth Bank
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MCEWEN and Commonwealth is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank 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 Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Commonwealth Bank go up and down completely randomly.
Pair Corralation between MCEWEN MINING and Commonwealth Bank
Assuming the 90 days horizon MCEWEN MINING INC is expected to generate 2.92 times more return on investment than Commonwealth Bank. However, MCEWEN MINING is 2.92 times more volatile than Commonwealth Bank of. It trades about 0.04 of its potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.08 per unit of risk. If you would invest 535.00 in MCEWEN MINING INC on September 3, 2024 and sell it today you would earn a total of 250.00 from holding MCEWEN MINING INC or generate 46.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCEWEN MINING INC vs. Commonwealth Bank of
Performance |
| Timeline |
| MCEWEN MINING INC |
| Commonwealth Bank |
MCEWEN MINING and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and Commonwealth Bank
The main advantage of trading using opposite MCEWEN MINING and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, Commonwealth Bank 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank's long position.| MCEWEN MINING vs. Superior Plus Corp | MCEWEN MINING vs. NMI Holdings | MCEWEN MINING vs. Origin Agritech | MCEWEN MINING vs. SIVERS SEMICONDUCTORS AB |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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