Correlation Between McEwen Mining and Sydbank

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

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

Diversification Opportunities for McEwen Mining and Sydbank

-0.54

Correlation Coefficient

McEwen Mining  Sydbank

Excellent diversification

The 3 months correlation between McEwen and Sydbank is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Sydbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank 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 Sydbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank has no effect on the direction of McEwen Mining i.e., McEwen Mining and Sydbank go up and down completely randomly.

Pair Corralation between McEwen Mining and Sydbank

Assuming the 90 days trading horizon McEwen Mining is expected to generate 2.5 times more return on investment than Sydbank. However, McEwen Mining is 2.5 times more volatile than Sydbank. It trades about 0.04 of its potential returns per unit of risk. Sydbank is currently generating about 0.07 per unit of risk. If you would invest  870.00  in McEwen Mining on September 5, 2024 and sell it today you would earn a total of  42.00  from holding McEwen Mining or generate 4.83% return on investment over 90 days.

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

McEwen Mining  vs.  Sydbank

McEwen Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in McEwen Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, McEwen Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sydbank

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sydbank is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with McEwen Mining and Sydbank

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

The idea behind McEwen Mining and Sydbank 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.