Correlation Between McEwen Mining and Atalaya Mining

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

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

Diversification Opportunities for McEwen Mining and Atalaya Mining

0.45

Correlation Coefficient

McEwen Mining  Atalaya Mining

Very weak diversification

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

Pair Corralation between McEwen Mining and Atalaya Mining

Assuming the 90 days trading horizon McEwen Mining is expected to generate 1.3 times more return on investment than Atalaya Mining. However, McEwen Mining is 1.3 times more volatile than Atalaya Mining. It trades about -0.03 of its potential returns per unit of risk. Atalaya Mining is currently generating about -0.05 per unit of risk. If you would invest  910.00  in McEwen Mining on August 30, 2024 and sell it today you would lose (87.00) from holding McEwen Mining or give up 9.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

McEwen Mining  vs.  Atalaya Mining

McEwen Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days McEwen Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Atalaya Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atalaya Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with McEwen Mining and Atalaya Mining

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

The idea behind McEwen Mining and Atalaya 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.