Correlation Between Almaden Minerals and McEwen Mining

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Can any of the company-specific risk be diversified away by investing in both Almaden Minerals 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 Almaden Minerals and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Almaden Minerals and McEwen Mining, you can compare the effects of market volatilities on Almaden Minerals 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 Almaden Minerals with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Almaden Minerals and McEwen Mining.

Diversification Opportunities for Almaden Minerals and McEwen Mining

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Almaden and McEwen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Almaden Minerals and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Almaden Minerals 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 Almaden Minerals 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 Almaden Minerals i.e., Almaden Minerals and McEwen Mining go up and down completely randomly.

Pair Corralation between Almaden Minerals and McEwen Mining

Considering the 90-day investment horizon Almaden Minerals is expected to generate 15.64 times less return on investment than McEwen Mining. But when comparing it to its historical volatility, Almaden Minerals is 1.62 times less risky than McEwen Mining. It trades about 0.01 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  611.00  in McEwen Mining on December 29, 2023 and sell it today you would earn a total of  352.00  from holding McEwen Mining or generate 57.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Almaden Minerals  vs.  McEwen Mining

 Performance 
       Timeline  
Almaden Minerals 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Almaden Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Almaden Minerals is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
McEwen Mining 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in McEwen Mining are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, McEwen Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Almaden Minerals and McEwen Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Almaden Minerals and McEwen Mining

The main advantage of trading using opposite Almaden Minerals and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Almaden Minerals 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.
The idea behind Almaden Minerals and McEwen Mining 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.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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