Correlation Between Mantaro Silver and McEwen Mining

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

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

Diversification Opportunities for Mantaro Silver and McEwen Mining

0.46

Correlation Coefficient

Mantaro Silver  McEwen Mining

Very weak diversification

The 3 months correlation between Mantaro and McEwen is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mantaro Silver Corp and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Mantaro Silver 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 Mantaro Silver Corp 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 Mantaro Silver i.e., Mantaro Silver and McEwen Mining go up and down completely randomly.

Pair Corralation between Mantaro Silver and McEwen Mining

Assuming the 90 days horizon Mantaro Silver Corp is expected to under-perform the McEwen Mining. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mantaro Silver Corp is 1.53 times less risky than McEwen Mining. The pink sheet trades about -0.22 of its potential returns per unit of risk. The McEwen Mining is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  795.00  in McEwen Mining on October 23, 2024 and sell it today you would earn a total of  44.00  from holding McEwen Mining or generate 5.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.0%
Values	Daily Returns

Mantaro Silver Corp  vs.  McEwen Mining

Mantaro Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mantaro Silver Corp 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.

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 Mantaro Silver and McEwen Mining

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

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.