Correlation Between Grupo Industrial and McEwen Mining

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

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

Diversification Opportunities for Grupo Industrial and McEwen Mining

0.0

Correlation Coefficient

Grupo Industrial  McEwen Mining

Pay attention - limited upside

The 3 months correlation between Grupo and McEwen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Industrial Saltillo and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Grupo Industrial 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 Grupo Industrial Saltillo 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 Grupo Industrial i.e., Grupo Industrial and McEwen Mining go up and down completely randomly.

Pair Corralation between Grupo Industrial and McEwen Mining

Assuming the 90 days trading horizon Grupo Industrial Saltillo is expected to under-perform the McEwen Mining. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Industrial Saltillo is 1.11 times less risky than McEwen Mining. The stock trades about 0.0 of its potential returns per unit of risk. The McEwen Mining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  7,500  in McEwen Mining on October 11, 2024 and sell it today you would earn a total of  12,300  from holding McEwen Mining or generate 164.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	88.87%
Values	Daily Returns

Grupo Industrial Saltillo  vs.  McEwen Mining

Grupo Industrial Saltillo

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Grupo Industrial Saltillo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Grupo Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 fairly strong basic indicators, McEwen Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grupo Industrial and McEwen Mining

The main advantage of trading using opposite Grupo Industrial and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Industrial 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 Grupo Industrial Saltillo 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.