Correlation Between McEwen Mining and International Business

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

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

Diversification Opportunities for McEwen Mining and International Business

0.18

Correlation Coefficient

McEwen Mining  International Business

Average diversification

The 3 months correlation between McEwen and International is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of McEwen Mining i.e., McEwen Mining and International Business go up and down completely randomly.

Pair Corralation between McEwen Mining and International Business

Assuming the 90 days trading horizon McEwen Mining is expected to generate 16.39 times more return on investment than International Business. However, McEwen Mining is 16.39 times more volatile than International Business Machines. It trades about 0.03 of its potential returns per unit of risk. International Business Machines is currently generating about 0.09 per unit of risk. If you would invest  720.00  in McEwen Mining on September 4, 2024 and sell it today you would earn a total of  111.00  from holding McEwen Mining or generate 15.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.27%
Values	Daily Returns

McEwen Mining  vs.  International Business Machine

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 comparatively stable basic indicators, McEwen Mining is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

International Business

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, International Business is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with McEwen Mining and International Business

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

The idea behind McEwen Mining and International Business Machines 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.