Correlation Between MCEWEN MINING and East Japan
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and East Japan 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 East Japan 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 East Japan Railway, you can compare the effects of market volatilities on MCEWEN MINING and East Japan 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 East Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and East Japan.
Diversification Opportunities for MCEWEN MINING and East Japan
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MCEWEN and East is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and East Japan Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Japan Railway 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 East Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Japan Railway has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and East Japan go up and down completely randomly.
Pair Corralation between MCEWEN MINING and East Japan
Assuming the 90 days horizon MCEWEN MINING INC is expected to generate 2.2 times more return on investment than East Japan. However, MCEWEN MINING is 2.2 times more volatile than East Japan Railway. It trades about -0.03 of its potential returns per unit of risk. East Japan Railway is currently generating about -0.09 per unit of risk. If you would invest 785.00 in MCEWEN MINING INC on September 27, 2024 and sell it today you would lose (25.00) from holding MCEWEN MINING INC or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCEWEN MINING INC vs. East Japan Railway
Performance |
| Timeline |
| MCEWEN MINING INC |
| East Japan Railway |
MCEWEN MINING and East Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and East Japan
The main advantage of trading using opposite MCEWEN MINING and East Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, East Japan 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 East Japan will offset losses from the drop in East Japan's long position.| MCEWEN MINING vs. Fresnillo plc | MCEWEN MINING vs. NEW PACIFIC METALS | MCEWEN MINING vs. THARISA NON LIST | MCEWEN MINING vs. Gemfields Group Limited |
| East Japan vs. Canadian National Railway | East Japan vs. MTR Limited | East Japan vs. CRRC Limited | East Japan vs. Central Japan Railway |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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