Correlation Between MCEWEN MINING and LANXESS Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha 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 LANXESS Aktiengesellschaft, you can compare the effects of market volatilities on MCEWEN MINING and LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and LANXESS Aktiengesellscha.
Diversification Opportunities for MCEWEN MINING and LANXESS Aktiengesellscha
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MCEWEN and LANXESS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and LANXESS Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANXESS Aktiengesellscha has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and LANXESS Aktiengesellscha go up and down completely randomly.
Pair Corralation between MCEWEN MINING and LANXESS Aktiengesellscha
Assuming the 90 days horizon MCEWEN MINING INC is expected to under-perform the LANXESS Aktiengesellscha. In addition to that, MCEWEN MINING is 1.27 times more volatile than LANXESS Aktiengesellschaft. It trades about -0.09 of its total potential returns per unit of risk. LANXESS Aktiengesellschaft is currently generating about -0.06 per unit of volatility. If you would invest 2,666 in LANXESS Aktiengesellschaft on September 4, 2024 and sell it today you would lose (116.00) from holding LANXESS Aktiengesellschaft or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MCEWEN MINING INC vs. LANXESS Aktiengesellschaft
Performance |
| Timeline |
| MCEWEN MINING INC |
| LANXESS Aktiengesellscha |
MCEWEN MINING and LANXESS Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and LANXESS Aktiengesellscha
The main advantage of trading using opposite MCEWEN MINING and LANXESS Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha will offset losses from the drop in LANXESS Aktiengesellscha's long position.| MCEWEN MINING vs. Superior Plus Corp | MCEWEN MINING vs. NMI Holdings | MCEWEN MINING vs. Origin Agritech | MCEWEN MINING vs. SIVERS SEMICONDUCTORS AB |
| LANXESS Aktiengesellscha vs. The Sherwin Williams | LANXESS Aktiengesellscha vs. Dupont De Nemours | LANXESS Aktiengesellscha vs. Superior Plus Corp | LANXESS Aktiengesellscha vs. NMI Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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