Correlation Between ANGLO ASIAN and MCEWEN MINING

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

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

Diversification Opportunities for ANGLO ASIAN and MCEWEN MINING

0.59

Correlation Coefficient

ANGLO ASIAN  MCEWEN MINING

Very weak diversification

The 3 months correlation between ANGLO and MCEWEN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC and ANGLO ASIAN 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 ANGLO ASIAN MINING are associated (or correlated) with MCEWEN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCEWEN MINING INC has no effect on the direction of ANGLO ASIAN i.e., ANGLO ASIAN and MCEWEN MINING go up and down completely randomly.

Pair Corralation between ANGLO ASIAN and MCEWEN MINING

Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 0.68 times more return on investment than MCEWEN MINING. However, ANGLO ASIAN MINING is 1.48 times less risky than MCEWEN MINING. It trades about 0.0 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about -0.03 per unit of risk. If you would invest  126.00  in ANGLO ASIAN MINING on October 8, 2024 and sell it today you would lose (2.00) from holding ANGLO ASIAN MINING or give up 1.59% of portfolio value over 90 days.

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

ANGLO ASIAN MINING  vs.  MCEWEN MINING INC

ANGLO ASIAN MINING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGLO ASIAN MINING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ANGLO ASIAN is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

MCEWEN MINING INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCEWEN MINING INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ANGLO ASIAN and MCEWEN MINING

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

The idea behind ANGLO ASIAN MINING and MCEWEN MINING INC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.