Correlation Between MCEWEN MINING and Waste Management
Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and Waste Management 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 Waste Management 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 Waste Management, you can compare the effects of market volatilities on MCEWEN MINING and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and Waste Management.
Diversification Opportunities for MCEWEN MINING and Waste Management
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MCEWEN and Waste is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Waste Management go up and down completely randomly.
Pair Corralation between MCEWEN MINING and Waste Management
Assuming the 90 days horizon MCEWEN MINING INC is expected to under-perform the Waste Management. In addition to that, MCEWEN MINING is 3.05 times more volatile than Waste Management. It trades about -0.18 of its total potential returns per unit of risk. Waste Management is currently generating about 0.36 per unit of volatility. If you would invest 20,200 in Waste Management on November 30, 2024 and sell it today you would earn a total of 1,835 from holding Waste Management or generate 9.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MCEWEN MINING INC vs. Waste Management
Performance |
Timeline |
MCEWEN MINING INC |
Waste Management |
MCEWEN MINING and Waste Management Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MCEWEN MINING and Waste Management
The main advantage of trading using opposite MCEWEN MINING and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management's long position.MCEWEN MINING vs. Air Transport Services | ||
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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