Correlation Between MTI Wireless and McEwen Mining

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

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

Diversification Opportunities for MTI Wireless and McEwen Mining

0.26

Correlation Coefficient

MTI Wireless  McEwen Mining

Modest diversification

The 3 months correlation between MTI and McEwen is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding MTI Wireless Edge and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and MTI Wireless 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 MTI Wireless Edge 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 MTI Wireless i.e., MTI Wireless and McEwen Mining go up and down completely randomly.

Pair Corralation between MTI Wireless and McEwen Mining

Assuming the 90 days trading horizon MTI Wireless Edge is expected to generate 0.69 times more return on investment than McEwen Mining. However, MTI Wireless Edge is 1.44 times less risky than McEwen Mining. It trades about 0.06 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.0 per unit of risk. If you would invest  4,100  in MTI Wireless Edge on September 4, 2024 and sell it today you would earn a total of  300.00  from holding MTI Wireless Edge or generate 7.32% return on investment over 90 days.

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

MTI Wireless Edge  vs.  McEwen Mining

MTI Wireless Edge

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MTI Wireless Edge are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, MTI Wireless may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 comparatively stable basic indicators, McEwen Mining is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MTI Wireless and McEwen Mining

The main advantage of trading using opposite MTI Wireless and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI Wireless 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 MTI Wireless Edge 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.