Correlation Between MCEWEN MINING and Plastic Omnium
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium, you can compare the effects of market volatilities on MCEWEN MINING and Plastic Omnium 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 Plastic Omnium. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and Plastic Omnium.
Diversification Opportunities for MCEWEN MINING and Plastic Omnium
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MCEWEN and Plastic is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Omnium 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 Plastic Omnium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Omnium has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Plastic Omnium go up and down completely randomly.
Pair Corralation between MCEWEN MINING and Plastic Omnium
Assuming the 90 days horizon MCEWEN MINING is expected to generate 11.36 times less return on investment than Plastic Omnium. In addition to that, MCEWEN MINING is 1.2 times more volatile than Plastic Omnium. It trades about 0.01 of its total potential returns per unit of risk. Plastic Omnium is currently generating about 0.1 per unit of volatility. If you would invest 859.00 in Plastic Omnium on November 2, 2024 and sell it today you would earn a total of 230.00 from holding Plastic Omnium or generate 26.78% 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. Plastic Omnium
Performance |
| Timeline |
| MCEWEN MINING INC |
| Plastic Omnium |
MCEWEN MINING and Plastic Omnium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and Plastic Omnium
The main advantage of trading using opposite MCEWEN MINING and Plastic Omnium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, Plastic Omnium 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 Plastic Omnium will offset losses from the drop in Plastic Omnium's long position.| MCEWEN MINING vs. Telecom Argentina SA | MCEWEN MINING vs. Cairo Communication SpA | MCEWEN MINING vs. Spirent Communications plc | MCEWEN MINING vs. MidCap Financial Investment |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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