Correlation Between MCEWEN MINING and Carsales

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Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and Carsales 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 Carsales 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 CarsalesCom, you can compare the effects of market volatilities on MCEWEN MINING and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and Carsales.

Diversification Opportunities for MCEWEN MINING and Carsales

MCEWENCarsalesDiversified AwayMCEWENCarsalesDiversified Away100%
0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between MCEWEN and Carsales is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Carsales go up and down completely randomly.

Pair Corralation between MCEWEN MINING and Carsales

Assuming the 90 days horizon MCEWEN MINING INC is expected to under-perform the Carsales. In addition to that, MCEWEN MINING is 1.77 times more volatile than CarsalesCom. It trades about -0.18 of its total potential returns per unit of risk. CarsalesCom is currently generating about -0.13 per unit of volatility. If you would invest  2,380  in CarsalesCom on November 30, 2024 and sell it today you would lose (140.00) from holding CarsalesCom or give up 5.88% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

MCEWEN MINING INC  vs.  CarsalesCom

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15US8 WN6
       Timeline  
MCEWEN MINING INC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days MCEWEN MINING INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb77.588.5
CarsalesCom 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CarsalesCom has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb21.52222.52323.52424.52525.5

MCEWEN MINING and Carsales Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.34-4.0-2.66-1.32-0.02051.212.453.684.91 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15US8 WN6
       Returns  

Pair Trading with MCEWEN MINING and Carsales

The main advantage of trading using opposite MCEWEN MINING and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCEWEN MINING position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.
The idea behind MCEWEN MINING INC and CarsalesCom pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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