Correlation Between MCEWEN MINING and SIMS METAL
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and SIMS METAL 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 SIMS METAL 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 SIMS METAL MGT, you can compare the effects of market volatilities on MCEWEN MINING and SIMS METAL 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 SIMS METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and SIMS METAL.
Diversification Opportunities for MCEWEN MINING and SIMS METAL
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between MCEWEN and SIMS is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and SIMS METAL MGT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMS METAL MGT 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 SIMS METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMS METAL MGT has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and SIMS METAL go up and down completely randomly.
Pair Corralation between MCEWEN MINING and SIMS METAL
Assuming the 90 days horizon MCEWEN MINING INC is expected to generate 1.52 times more return on investment than SIMS METAL. However, MCEWEN MINING is 1.52 times more volatile than SIMS METAL MGT. It trades about 0.11 of its potential returns per unit of risk. SIMS METAL MGT is currently generating about -0.04 per unit of risk. If you would invest 795.00 in MCEWEN MINING INC on September 13, 2024 and sell it today you would earn a total of 60.00 from holding MCEWEN MINING INC or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MCEWEN MINING INC vs. SIMS METAL MGT
Performance |
| Timeline |
| MCEWEN MINING INC |
| SIMS METAL MGT |
MCEWEN MINING and SIMS METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and SIMS METAL
The main advantage of trading using opposite MCEWEN MINING and SIMS METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, SIMS METAL 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 SIMS METAL will offset losses from the drop in SIMS METAL's long position.| MCEWEN MINING vs. NEW PACIFIC METALS | MCEWEN MINING vs. Superior Plus Corp | MCEWEN MINING vs. SIVERS SEMICONDUCTORS AB | MCEWEN MINING vs. Norsk Hydro ASA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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