Correlation Between Metalla Royalty and McEwen Mining

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

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

Diversification Opportunities for Metalla Royalty and McEwen Mining

0.84

Correlation Coefficient

Metalla Royalty  McEwen Mining

Very poor diversification

The 3 months correlation between Metalla and McEwen is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Metalla Royalty Streaming and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Metalla Royalty 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 Metalla Royalty Streaming 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 Metalla Royalty i.e., Metalla Royalty and McEwen Mining go up and down completely randomly.

Pair Corralation between Metalla Royalty and McEwen Mining

Considering the 90-day investment horizon Metalla Royalty Streaming is expected to generate 1.17 times more return on investment than McEwen Mining. However, Metalla Royalty is 1.17 times more volatile than McEwen Mining. It trades about 0.02 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.03 per unit of risk. If you would invest  299.00  in Metalla Royalty Streaming on August 30, 2024 and sell it today you would earn a total of  2.00  from holding Metalla Royalty Streaming or generate 0.67% return on investment over 90 days.

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

Metalla Royalty Streaming  vs.  McEwen Mining

Metalla Royalty Streaming

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Metalla Royalty Streaming are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Metalla Royalty is not utilizing all of its potentials. The recent 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 latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Metalla Royalty and McEwen Mining

The main advantage of trading using opposite Metalla Royalty and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalla Royalty 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 Metalla Royalty Streaming 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.