Correlation Between MCEWEN MINING and LANDSEA HOMES

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

Diversification Opportunities for MCEWEN MINING and LANDSEA HOMES

0.28

Correlation Coefficient

MCEWEN MINING  LANDSEA HOMES

Modest diversification

The 3 months correlation between MCEWEN and LANDSEA is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and LANDSEA HOMES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANDSEA HOMES P 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 LANDSEA HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANDSEA HOMES P has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and LANDSEA HOMES go up and down completely randomly.

Pair Corralation between MCEWEN MINING and LANDSEA HOMES

Assuming the 90 days horizon MCEWEN MINING INC is expected to under-perform the LANDSEA HOMES. In addition to that, MCEWEN MINING is 1.11 times more volatile than LANDSEA HOMES P. It trades about -0.05 of its total potential returns per unit of risk. LANDSEA HOMES P is currently generating about -0.02 per unit of volatility. If you would invest  1,030  in LANDSEA HOMES P on September 24, 2024 and sell it today you would lose (205.00) from holding LANDSEA HOMES P or give up 19.9% of portfolio value over 90 days.

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

MCEWEN MINING INC  vs.  LANDSEA HOMES P

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.

LANDSEA HOMES P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LANDSEA HOMES P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with MCEWEN MINING and LANDSEA HOMES

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

The idea behind MCEWEN MINING INC and LANDSEA HOMES P 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .