Correlation Between MCEWEN MINING and FIREWEED METALS
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and FIREWEED METALS 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 FIREWEED METALS 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 FIREWEED METALS P, you can compare the effects of market volatilities on MCEWEN MINING and FIREWEED METALS 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 FIREWEED METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and FIREWEED METALS.
Diversification Opportunities for MCEWEN MINING and FIREWEED METALS
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MCEWEN and FIREWEED is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and FIREWEED METALS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIREWEED METALS P 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 FIREWEED METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIREWEED METALS P has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and FIREWEED METALS go up and down completely randomly.
Pair Corralation between MCEWEN MINING and FIREWEED METALS
Assuming the 90 days horizon MCEWEN MINING is expected to generate 2.03 times less return on investment than FIREWEED METALS. But when comparing it to its historical volatility, MCEWEN MINING INC is 1.03 times less risky than FIREWEED METALS. It trades about 0.02 of its potential returns per unit of risk. FIREWEED METALS P is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 62.00 in FIREWEED METALS P on August 31, 2024 and sell it today you would earn a total of 28.00 from holding FIREWEED METALS P or generate 45.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCEWEN MINING INC vs. FIREWEED METALS P
Performance |
| Timeline |
| MCEWEN MINING INC |
| FIREWEED METALS P |
MCEWEN MINING and FIREWEED METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and FIREWEED METALS
The main advantage of trading using opposite MCEWEN MINING and FIREWEED METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, FIREWEED METALS 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 FIREWEED METALS will offset losses from the drop in FIREWEED METALS's long position.| MCEWEN MINING vs. BLUESCOPE STEEL | MCEWEN MINING vs. MEDICAL FACILITIES NEW | MCEWEN MINING vs. IMAGIN MEDICAL INC | MCEWEN MINING vs. Avanos Medical |
| FIREWEED METALS vs. Rio Tinto Group | FIREWEED METALS vs. Liontown Resources Limited | FIREWEED METALS vs. American Lithium Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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