Correlation Between MCEWEN MINING and Microchip Technology
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and Microchip Technology 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 Microchip Technology 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 Microchip Technology Incorporated, you can compare the effects of market volatilities on MCEWEN MINING and Microchip Technology 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 Microchip Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and Microchip Technology.
Diversification Opportunities for MCEWEN MINING and Microchip Technology
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MCEWEN and Microchip is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Microchip Technology Incorpora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microchip Technology 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 Microchip Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microchip Technology has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Microchip Technology go up and down completely randomly.
Pair Corralation between MCEWEN MINING and Microchip Technology
Assuming the 90 days horizon MCEWEN MINING INC is expected to generate 1.7 times more return on investment than Microchip Technology. However, MCEWEN MINING is 1.7 times more volatile than Microchip Technology Incorporated. It trades about 0.04 of its potential returns per unit of risk. Microchip Technology Incorporated is currently generating about 0.0 per unit of risk. If you would invest 545.00 in MCEWEN MINING INC on August 24, 2024 and sell it today you would earn a total of 285.00 from holding MCEWEN MINING INC or generate 52.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCEWEN MINING INC vs. Microchip Technology Incorpora
Performance |
| Timeline |
| MCEWEN MINING INC |
| Microchip Technology |
MCEWEN MINING and Microchip Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and Microchip Technology
The main advantage of trading using opposite MCEWEN MINING and Microchip Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, Microchip Technology 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 Microchip Technology will offset losses from the drop in Microchip Technology'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 |
| Microchip Technology vs. MCEWEN MINING INC | Microchip Technology vs. ALGOMA STEEL GROUP | Microchip Technology vs. GALENA MINING LTD | Microchip Technology vs. LION ONE METALS |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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