Correlation Between Clifton Mining and McEwen Mining

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

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

Diversification Opportunities for Clifton Mining and McEwen Mining

0.37

Correlation Coefficient

Clifton Mining  McEwen Mining

Weak diversification

The 3 months correlation between Clifton and McEwen is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Clifton Mining Co and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Clifton 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 Clifton Mining Co 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 has no effect on the direction of Clifton Mining i.e., Clifton Mining and McEwen Mining go up and down completely randomly.

Pair Corralation between Clifton Mining and McEwen Mining

Given the investment horizon of 90 days Clifton Mining Co is expected to under-perform the McEwen Mining. In addition to that, Clifton Mining is 2.38 times more volatile than McEwen Mining. It trades about -0.11 of its total potential returns per unit of risk. McEwen Mining is currently generating about -0.08 per unit of volatility. If you would invest  868.00  in McEwen Mining on October 8, 2024 and sell it today you would lose (50.00) from holding McEwen Mining or give up 5.76% of portfolio value over 90 days.

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

Clifton Mining Co  vs.  McEwen Mining

Clifton Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clifton Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Clifton Mining and McEwen Mining

The main advantage of trading using opposite Clifton Mining and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clifton Mining 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 Clifton Mining Co and McEwen 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.