Correlation Between McEwen Mining and Alexco Resource

Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Alexco Resource 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 Alexco Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between McEwen Mining and Alexco Resource Corp, you can compare the effects of market volatilities on McEwen Mining and Alexco Resource 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 Alexco Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Alexco Resource.

Diversification Opportunities for McEwen Mining and Alexco Resource

0.0

Correlation Coefficient

McEwen Mining  Alexco Resource

Pay attention - limited upside

The 3 months correlation between McEwen and Alexco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Alexco Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexco Resource Corp 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 are associated (or correlated) with Alexco Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexco Resource Corp has no effect on the direction of McEwen Mining i.e., McEwen Mining and Alexco Resource go up and down completely randomly.

Pair Corralation between McEwen Mining and Alexco Resource

If you would invest  908.00  in McEwen Mining on January 24, 2024 and sell it today you would earn a total of  179.00  from holding McEwen Mining or generate 19.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

McEwen Mining  vs.  Alexco Resource Corp

McEwen Mining

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in McEwen Mining are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, McEwen Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Alexco Resource Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alexco Resource Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Alexco Resource is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with McEwen Mining and Alexco Resource

The main advantage of trading using opposite McEwen Mining and Alexco Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Alexco Resource 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 Alexco Resource will offset losses from the drop in Alexco Resource's long position.

The idea behind McEwen Mining and Alexco Resource Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.