Correlation Between MCEWEN MINING and DANIMER SCIENTIFIC

Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC, you can compare the effects of market volatilities on MCEWEN MINING and DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and DANIMER SCIENTIFIC.

Diversification Opportunities for MCEWEN MINING and DANIMER SCIENTIFIC

0.69

Correlation Coefficient

MCEWEN MINING  DANIMER SCIENTIFIC

Poor diversification

The 3 months correlation between MCEWEN and DANIMER is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and DANIMER SCIENTIFIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DANIMER SCIENTIFIC 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 DANIMER SCIENTIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DANIMER SCIENTIFIC has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and DANIMER SCIENTIFIC go up and down completely randomly.

Pair Corralation between MCEWEN MINING and DANIMER SCIENTIFIC

Assuming the 90 days horizon MCEWEN MINING INC is expected to generate 0.88 times more return on investment than DANIMER SCIENTIFIC. However, MCEWEN MINING INC is 1.14 times less risky than DANIMER SCIENTIFIC. It trades about -0.04 of its potential returns per unit of risk. DANIMER SCIENTIFIC is currently generating about -0.21 per unit of risk. If you would invest  910.00  in MCEWEN MINING INC on October 12, 2024 and sell it today you would lose (105.00) from holding MCEWEN MINING INC or give up 11.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

MCEWEN MINING INC  vs.  DANIMER SCIENTIFIC

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 fragile 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.

DANIMER SCIENTIFIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DANIMER SCIENTIFIC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic 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 DANIMER SCIENTIFIC

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

The idea behind MCEWEN MINING INC and DANIMER SCIENTIFIC 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.