Correlation Between MCEWEN MINING and SOFI TECHNOLOGIES

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

By analyzing existing cross correlation between MCEWEN MINING INC and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on MCEWEN MINING and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and SOFI TECHNOLOGIES.

Diversification Opportunities for MCEWEN MINING and SOFI TECHNOLOGIES

-0.7

Correlation Coefficient

MCEWEN MINING  SOFI TECHNOLOGIES

Excellent diversification

The 3 months correlation between MCEWEN and SOFI is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES 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 INC are associated (or correlated) with SOFI TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFI TECHNOLOGIES has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and SOFI TECHNOLOGIES go up and down completely randomly.

Pair Corralation between MCEWEN MINING and SOFI TECHNOLOGIES

Assuming the 90 days horizon MCEWEN MINING is expected to generate 5.64 times less return on investment than SOFI TECHNOLOGIES. In addition to that, MCEWEN MINING is 1.02 times more volatile than SOFI TECHNOLOGIES. It trades about 0.01 of its total potential returns per unit of risk. SOFI TECHNOLOGIES is currently generating about 0.05 per unit of volatility. If you would invest  1,339  in SOFI TECHNOLOGIES on October 17, 2024 and sell it today you would earn a total of  61.00  from holding SOFI TECHNOLOGIES or generate 4.56% return on investment over 90 days.

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

MCEWEN MINING INC  vs.  SOFI TECHNOLOGIES

MCEWEN MINING INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCEWEN MINING INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SOFI TECHNOLOGIES

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SOFI TECHNOLOGIES are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SOFI TECHNOLOGIES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MCEWEN MINING and SOFI TECHNOLOGIES

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

The idea behind MCEWEN MINING INC and SOFI TECHNOLOGIES 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.