Correlation Between MCEWEN MINING and Daido Steel
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and Daido Steel 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 Daido Steel 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 Daido Steel Co, you can compare the effects of market volatilities on MCEWEN MINING and Daido Steel 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 Daido Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and Daido Steel.
Diversification Opportunities for MCEWEN MINING and Daido Steel
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MCEWEN and Daido is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Daido Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daido Steel 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 Daido Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daido Steel has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Daido Steel go up and down completely randomly.
Pair Corralation between MCEWEN MINING and Daido Steel
Assuming the 90 days horizon MCEWEN MINING INC is expected to generate 1.85 times more return on investment than Daido Steel. However, MCEWEN MINING is 1.85 times more volatile than Daido Steel Co. It trades about 0.02 of its potential returns per unit of risk. Daido Steel Co is currently generating about 0.02 per unit of risk. If you would invest 735.00 in MCEWEN MINING INC on August 31, 2024 and sell it today you would earn a total of 40.00 from holding MCEWEN MINING INC or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCEWEN MINING INC vs. Daido Steel Co
Performance |
| Timeline |
| MCEWEN MINING INC |
| Daido Steel |
MCEWEN MINING and Daido Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and Daido Steel
The main advantage of trading using opposite MCEWEN MINING and Daido Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, Daido Steel 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 Daido Steel will offset losses from the drop in Daido Steel's long position.| MCEWEN MINING vs. BLUESCOPE STEEL | MCEWEN MINING vs. MEDICAL FACILITIES NEW | MCEWEN MINING vs. IMAGIN MEDICAL INC | MCEWEN MINING vs. Avanos Medical |
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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