Correlation Between MCEWEN MINING and LENNAR CORP
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and LENNAR CORP 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 LENNAR CORP 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 LENNAR P B, you can compare the effects of market volatilities on MCEWEN MINING and LENNAR CORP 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 LENNAR CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and LENNAR CORP.
Diversification Opportunities for MCEWEN MINING and LENNAR CORP
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MCEWEN and LENNAR is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and LENNAR P B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENNAR CORP 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 LENNAR CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENNAR CORP has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and LENNAR CORP go up and down completely randomly.
Pair Corralation between MCEWEN MINING and LENNAR CORP
Assuming the 90 days horizon MCEWEN MINING INC is expected to generate 1.53 times more return on investment than LENNAR CORP. However, MCEWEN MINING is 1.53 times more volatile than LENNAR P B. It trades about 0.13 of its potential returns per unit of risk. LENNAR P B is currently generating about 0.09 per unit of risk. If you would invest 765.00 in MCEWEN MINING INC on October 21, 2024 and sell it today you would earn a total of 40.00 from holding MCEWEN MINING INC or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCEWEN MINING INC vs. LENNAR P B
Performance |
| Timeline |
| MCEWEN MINING INC |
| LENNAR CORP |
MCEWEN MINING and LENNAR CORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and LENNAR CORP
The main advantage of trading using opposite MCEWEN MINING and LENNAR CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, LENNAR CORP 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 LENNAR CORP will offset losses from the drop in LENNAR CORP's long position.| MCEWEN MINING vs. LOANDEPOT INC A | MCEWEN MINING vs. Canon Marketing Japan | MCEWEN MINING vs. H2O Retailing | MCEWEN MINING vs. Indutrade AB |
| LENNAR CORP vs. MOUNT GIBSON IRON | LENNAR CORP vs. RELIANCE STEEL AL | LENNAR CORP vs. Insteel Industries | LENNAR CORP vs. MCEWEN MINING INC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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