Correlation Between Canon and MCEWEN MINING

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

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

Diversification Opportunities for Canon and MCEWEN MINING

-0.61

Correlation Coefficient

Canon  MCEWEN MINING

Excellent diversification

The 3 months correlation between Canon and MCEWEN is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Canon Inc 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 Canon 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 Canon Inc 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 Canon i.e., Canon and MCEWEN MINING go up and down completely randomly.

Pair Corralation between Canon and MCEWEN MINING

Assuming the 90 days trading horizon Canon Inc is expected to generate 0.49 times more return on investment than MCEWEN MINING. However, Canon Inc is 2.05 times less risky than MCEWEN MINING. It trades about 0.27 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about -0.32 per unit of risk. If you would invest  2,920  in Canon Inc on December 5, 2024 and sell it today you would earn a total of  300.00  from holding Canon Inc or generate 10.27% return on investment over 90 days.

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

Canon Inc  vs.  MCEWEN MINING INC

Canon Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canon Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Canon may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MCEWEN MINING INC

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Canon and MCEWEN MINING

The main advantage of trading using opposite Canon and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canon 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 Canon Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.