Correlation Between MCEWEN MINING and Holmen AB
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and Holmen AB 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 Holmen AB 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 Holmen AB, you can compare the effects of market volatilities on MCEWEN MINING and Holmen AB 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 Holmen AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and Holmen AB.
Diversification Opportunities for MCEWEN MINING and Holmen AB
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MCEWEN and Holmen is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Holmen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holmen AB 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 Holmen AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holmen AB has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Holmen AB go up and down completely randomly.
Pair Corralation between MCEWEN MINING and Holmen AB
Assuming the 90 days horizon MCEWEN MINING INC is expected to under-perform the Holmen AB. In addition to that, MCEWEN MINING is 2.85 times more volatile than Holmen AB. It trades about -0.06 of its total potential returns per unit of risk. Holmen AB is currently generating about -0.06 per unit of volatility. If you would invest 3,840 in Holmen AB on September 2, 2024 and sell it today you would lose (344.00) from holding Holmen AB or give up 8.96% 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. Holmen AB
Performance |
| Timeline |
| MCEWEN MINING INC |
| Holmen AB |
MCEWEN MINING and Holmen AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and Holmen AB
The main advantage of trading using opposite MCEWEN MINING and Holmen AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, Holmen AB 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 Holmen AB will offset losses from the drop in Holmen AB's long position.| MCEWEN MINING vs. LG Electronics | MCEWEN MINING vs. LIFENET INSURANCE CO | MCEWEN MINING vs. STMicroelectronics NV | MCEWEN MINING vs. Electronic Arts |
| Holmen AB vs. MCEWEN MINING INC | Holmen AB vs. GEELY AUTOMOBILE | Holmen AB vs. X FAB Silicon Foundries | Holmen AB vs. AECOM TECHNOLOGY |
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 CEOs Directory module to screen CEOs from public companies around the world.
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