Correlation Between Easterly Government and MCEWEN MINING

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Can any of the company-specific risk be diversified away by investing in both Easterly Government 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 Easterly Government and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easterly Government Properties and MCEWEN MINING INC, you can compare the effects of market volatilities on Easterly Government 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 Easterly Government with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easterly Government and MCEWEN MINING.

Diversification Opportunities for Easterly Government and MCEWEN MINING

EasterlyMCEWENDiversified AwayEasterlyMCEWENDiversified Away100%
0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Easterly and MCEWEN is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Easterly Government Properties 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 Easterly Government 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 Easterly Government Properties 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 Easterly Government i.e., Easterly Government and MCEWEN MINING go up and down completely randomly.

Pair Corralation between Easterly Government and MCEWEN MINING

Assuming the 90 days horizon Easterly Government Properties is expected to generate 0.48 times more return on investment than MCEWEN MINING. However, Easterly Government Properties is 2.07 times less risky than MCEWEN MINING. It trades about -0.1 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about -0.05 per unit of risk. If you would invest  1,109  in Easterly Government Properties on November 18, 2024 and sell it today you would lose (106.00) from holding Easterly Government Properties or give up 9.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Easterly Government Properties  vs.  MCEWEN MINING INC

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50
JavaScript chart by amCharts 3.21.15E05 US8
       Timeline  
Easterly Government 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Easterly Government Properties 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1010.51111.5
MCEWEN MINING INC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.588.5

Easterly Government and MCEWEN MINING Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.71-2.06-1.41-0.75-0.10.461.041.622.22.78 0.050.100.15
JavaScript chart by amCharts 3.21.15E05 US8
       Returns  

Pair Trading with Easterly Government and MCEWEN MINING

The main advantage of trading using opposite Easterly Government and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easterly Government 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 Easterly Government Properties 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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