Correlation Between Vista Oil and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Vista Oil and McEwen Mining 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 Vista Oil and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Oil Gas and McEwen Mining, you can compare the effects of market volatilities on Vista Oil and McEwen Mining 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 Vista Oil with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Oil and McEwen Mining.
Diversification Opportunities for Vista Oil and McEwen Mining
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vista and McEwen is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vista Oil Gas and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Vista Oil 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 Vista Oil Gas are associated (or correlated) with McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Vista Oil i.e., Vista Oil and McEwen Mining go up and down completely randomly.
Pair Corralation between Vista Oil and McEwen Mining
Assuming the 90 days trading horizon Vista Oil Gas is expected to generate 0.61 times more return on investment than McEwen Mining. However, Vista Oil Gas is 1.65 times less risky than McEwen Mining. It trades about 0.09 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.05 per unit of risk. If you would invest 30,900 in Vista Oil Gas on September 21, 2024 and sell it today you would earn a total of 78,341 from holding Vista Oil Gas or generate 253.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vista Oil Gas vs. McEwen Mining
Performance |
| Timeline |
| Vista Oil Gas |
| McEwen Mining |
Vista Oil and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Oil and McEwen Mining
The main advantage of trading using opposite Vista Oil and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Oil position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Vista Oil vs. McEwen Mining | Vista Oil vs. First Majestic Silver | Vista Oil vs. CVS Health | Vista Oil vs. FIBRA Storage |
| McEwen Mining vs. Grupo Sports World | McEwen Mining vs. Lloyds Banking Group | McEwen Mining vs. Prudential Financial | McEwen Mining vs. Monster Beverage Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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