Correlation Between Amadeus IT and MCEWEN MINING

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

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

Diversification Opportunities for Amadeus IT and MCEWEN MINING

0.25

Correlation Coefficient

Amadeus IT  MCEWEN MINING

Modest diversification

The 3 months correlation between Amadeus and MCEWEN is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Group 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 Amadeus IT 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 Amadeus IT Group 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 Amadeus IT i.e., Amadeus IT and MCEWEN MINING go up and down completely randomly.

Pair Corralation between Amadeus IT and MCEWEN MINING

Assuming the 90 days trading horizon Amadeus IT is expected to generate 3.54 times less return on investment than MCEWEN MINING. But when comparing it to its historical volatility, Amadeus IT Group is 2.44 times less risky than MCEWEN MINING. It trades about 0.05 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  765.00  in MCEWEN MINING INC on October 27, 2024 and sell it today you would earn a total of  25.00  from holding MCEWEN MINING INC or generate 3.27% return on investment over 90 days.

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

Amadeus IT Group  vs.  MCEWEN MINING INC

Amadeus IT Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amadeus IT Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Amadeus IT is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Amadeus IT and MCEWEN MINING

The main advantage of trading using opposite Amadeus IT and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amadeus IT 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 Amadeus IT Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..