Correlation Between McEwen Mining and Toyota

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

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

Diversification Opportunities for McEwen Mining and Toyota

0.0

Correlation Coefficient

McEwen Mining  Toyota

Pay attention - limited upside

The 3 months correlation between McEwen and Toyota is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Toyota Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toyota Motor 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 Toyota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toyota Motor has no effect on the direction of McEwen Mining i.e., McEwen Mining and Toyota go up and down completely randomly.

Pair Corralation between McEwen Mining and Toyota

If you would invest  357,000  in Toyota Motor on October 26, 2024 and sell it today you would earn a total of  44,000  from holding Toyota Motor or generate 12.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	17.07%
Values	Daily Returns

McEwen Mining  vs.  Toyota Motor

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.

Toyota Motor

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days Toyota Motor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unfluctuating basic indicators, Toyota showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with McEwen Mining and Toyota

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

The idea behind McEwen Mining and Toyota Motor 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.