Correlation Between MCEWEN MINING and POWER METALS
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and POWER 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 POWER 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 POWER METALS, you can compare the effects of market volatilities on MCEWEN MINING and POWER 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 POWER METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and POWER METALS.
Diversification Opportunities for MCEWEN MINING and POWER METALS
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MCEWEN and POWER is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and POWER METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POWER METALS 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 POWER METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POWER METALS has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and POWER METALS go up and down completely randomly.
Pair Corralation between MCEWEN MINING and POWER METALS
Assuming the 90 days horizon MCEWEN MINING INC is expected to generate 0.88 times more return on investment than POWER METALS. However, MCEWEN MINING INC is 1.14 times less risky than POWER METALS. It trades about 0.19 of its potential returns per unit of risk. POWER METALS is currently generating about 0.1 per unit of risk. If you would invest 760.00 in MCEWEN MINING INC on September 15, 2024 and sell it today you would earn a total of 105.00 from holding MCEWEN MINING INC or generate 13.82% 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. POWER METALS
Performance |
| Timeline |
| MCEWEN MINING INC |
| POWER METALS |
MCEWEN MINING and POWER METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCEWEN MINING and POWER METALS
The main advantage of trading using opposite MCEWEN MINING and POWER METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, POWER 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 POWER METALS will offset losses from the drop in POWER METALS's long position.| MCEWEN MINING vs. NEW PACIFIC METALS | MCEWEN MINING vs. Superior Plus Corp | MCEWEN MINING vs. SIVERS SEMICONDUCTORS AB | MCEWEN MINING vs. Norsk Hydro ASA |
| POWER METALS vs. MCEWEN MINING INC | POWER METALS vs. GRIFFIN MINING LTD | POWER METALS vs. Evolution Mining Limited | POWER METALS vs. Internet Thailand PCL |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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