Correlation Between McEwen Mining and EasyJet PLC

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

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

Diversification Opportunities for McEwen Mining and EasyJet PLC

-0.63

Correlation Coefficient

McEwen Mining  EasyJet PLC

Excellent diversification

The 3 months correlation between McEwen and EasyJet is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and EasyJet PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EasyJet PLC 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 EasyJet PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EasyJet PLC has no effect on the direction of McEwen Mining i.e., McEwen Mining and EasyJet PLC go up and down completely randomly.

Pair Corralation between McEwen Mining and EasyJet PLC

Assuming the 90 days trading horizon McEwen Mining is expected to under-perform the EasyJet PLC. In addition to that, McEwen Mining is 2.01 times more volatile than EasyJet PLC. It trades about -0.08 of its total potential returns per unit of risk. EasyJet PLC is currently generating about 0.11 per unit of volatility. If you would invest  49,090  in EasyJet PLC on October 6, 2024 and sell it today you would earn a total of  4,950  from holding EasyJet PLC or generate 10.08% return on investment over 90 days.

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

McEwen Mining  vs.  EasyJet PLC

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

EasyJet PLC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EasyJet PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, EasyJet PLC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with McEwen Mining and EasyJet PLC

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

The idea behind McEwen Mining and EasyJet PLC 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.