Correlation Between MCEWEN MINING and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and Methode Electronics 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 Methode Electronics 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 Methode Electronics, you can compare the effects of market volatilities on MCEWEN MINING and Methode Electronics 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 Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and Methode Electronics.
Diversification Opportunities for MCEWEN MINING and Methode Electronics
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between MCEWEN and Methode is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics 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 Methode Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methode Electronics has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Methode Electronics go up and down completely randomly.
Pair Corralation between MCEWEN MINING and Methode Electronics
Assuming the 90 days horizon MCEWEN MINING INC is expected to under-perform the Methode Electronics. But the stock apears to be less risky and, when comparing its historical volatility, MCEWEN MINING INC is 1.56 times less risky than Methode Electronics. The stock trades about -0.06 of its potential returns per unit of risk. The Methode Electronics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,043 in Methode Electronics on September 1, 2024 and sell it today you would lose (43.00) from holding Methode Electronics or give up 4.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCEWEN MINING INC vs. Methode Electronics
Performance |
| Timeline |
| MCEWEN MINING INC |
| Methode Electronics |
MCEWEN MINING and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and Methode Electronics
The main advantage of trading using opposite MCEWEN MINING and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, Methode Electronics 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 Methode Electronics will offset losses from the drop in Methode Electronics' long position.| MCEWEN MINING vs. COMMERCIAL VEHICLE | MCEWEN MINING vs. Pick n Pay | MCEWEN MINING vs. PICKN PAY STORES | MCEWEN MINING vs. Commercial Vehicle Group |
| Methode Electronics vs. Southwest Airlines Co | Methode Electronics vs. Media and Games | Methode Electronics vs. NAKED WINES PLC | Methode Electronics vs. Singapore Airlines Limited |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |