Correlation Between McEwen Mining and Amgen

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

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

Diversification Opportunities for McEwen Mining and Amgen

-0.53

Correlation Coefficient

McEwen Mining  Amgen

Excellent diversification

The 3 months correlation between McEwen and Amgen is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and McEwen Mining 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 McEwen Mining are associated (or correlated) with Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of McEwen Mining i.e., McEwen Mining and Amgen go up and down completely randomly.

Pair Corralation between McEwen Mining and Amgen

Assuming the 90 days trading horizon McEwen Mining is expected to under-perform the Amgen. In addition to that, McEwen Mining is 2.07 times more volatile than Amgen Inc. It trades about -0.17 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.07 per unit of volatility. If you would invest  573,970  in Amgen Inc on December 4, 2024 and sell it today you would earn a total of  29,230  from holding Amgen Inc or generate 5.09% return on investment over 90 days.

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

McEwen Mining  vs.  Amgen Inc

McEwen Mining

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Amgen Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amgen Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Amgen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with McEwen Mining and Amgen

The main advantage of trading using opposite McEwen Mining and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.

The idea behind McEwen Mining and Amgen 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.