Correlation Between McEwen Mining and Compania

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

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

Diversification Opportunities for McEwen Mining and Compania

0.45

Correlation Coefficient

McEwen Mining  Compania

Very weak diversification

The 3 months correlation between McEwen and Compania is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Compania de Minas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania de Minas 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 Compania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania de Minas has no effect on the direction of McEwen Mining i.e., McEwen Mining and Compania go up and down completely randomly.

Pair Corralation between McEwen Mining and Compania

Considering the 90-day investment horizon McEwen Mining is expected to generate 1.35 times more return on investment than Compania. However, McEwen Mining is 1.35 times more volatile than Compania de Minas. It trades about 0.31 of its potential returns per unit of risk. Compania de Minas is currently generating about -0.13 per unit of risk. If you would invest  908.00  in McEwen Mining on January 25, 2024 and sell it today you would earn a total of  184.00  from holding McEwen Mining or generate 20.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

McEwen Mining  vs.  Compania de Minas

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 fragile basic indicators, McEwen Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Compania de Minas

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Compania de Minas are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Compania may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with McEwen Mining and Compania

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

The idea behind McEwen Mining and Compania de Minas 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.