Correlation Between McEwen Mining and Libero Copper

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

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

Diversification Opportunities for McEwen Mining and Libero Copper

0.18

Correlation Coefficient

McEwen Mining  Libero Copper

Average diversification

The 3 months correlation between McEwen and Libero is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Libero Copper Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libero Copper Gold 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 Libero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libero Copper Gold has no effect on the direction of McEwen Mining i.e., McEwen Mining and Libero Copper go up and down completely randomly.

Pair Corralation between McEwen Mining and Libero Copper

Considering the 90-day investment horizon McEwen Mining is expected to under-perform the Libero Copper. But the stock apears to be less risky and, when comparing its historical volatility, McEwen Mining is 2.18 times less risky than Libero Copper. The stock trades about -0.12 of its potential returns per unit of risk. The Libero Copper Gold is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Libero Copper Gold on October 23, 2024 and sell it today you would lose (7.00) from holding Libero Copper Gold or give up 25.0% of portfolio value over 90 days.

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

McEwen Mining  vs.  Libero Copper Gold

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.

Libero Copper Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Libero Copper Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary 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.

Pair Trading with McEwen Mining and Libero Copper

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

The idea behind McEwen Mining and Libero Copper Gold 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.