Correlation Between MCEWEN MINING and DIVERSIFIED ROYALTY

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

Diversification Opportunities for MCEWEN MINING and DIVERSIFIED ROYALTY

-0.02

Correlation Coefficient

MCEWEN MINING  DIVERSIFIED ROYALTY

Good diversification

The 3 months correlation between MCEWEN and DIVERSIFIED is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and DIVERSIFIED ROYALTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIVERSIFIED ROYALTY 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 DIVERSIFIED ROYALTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIVERSIFIED ROYALTY has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and DIVERSIFIED ROYALTY go up and down completely randomly.

Pair Corralation between MCEWEN MINING and DIVERSIFIED ROYALTY

Assuming the 90 days horizon MCEWEN MINING is expected to generate 7.67 times less return on investment than DIVERSIFIED ROYALTY. In addition to that, MCEWEN MINING is 1.3 times more volatile than DIVERSIFIED ROYALTY. It trades about 0.0 of its total potential returns per unit of risk. DIVERSIFIED ROYALTY is currently generating about 0.05 per unit of volatility. If you would invest  184.00  in DIVERSIFIED ROYALTY on September 16, 2024 and sell it today you would earn a total of  11.00  from holding DIVERSIFIED ROYALTY or generate 5.98% return on investment over 90 days.

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

MCEWEN MINING INC  vs.  DIVERSIFIED ROYALTY

MCEWEN MINING INC

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days MCEWEN MINING INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MCEWEN MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

DIVERSIFIED ROYALTY

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DIVERSIFIED ROYALTY are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DIVERSIFIED ROYALTY may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with MCEWEN MINING and DIVERSIFIED ROYALTY

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

The idea behind MCEWEN MINING INC and DIVERSIFIED ROYALTY 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.