Correlation Between MCEWEN MINING and Taylor Morrison

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

Diversification Opportunities for MCEWEN MINING and Taylor Morrison

-0.32

Correlation Coefficient

MCEWEN MINING  Taylor Morrison

Very good diversification

The 3 months correlation between MCEWEN and Taylor is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Taylor Morrison Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taylor Morrison Home 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 Taylor Morrison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taylor Morrison Home has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Taylor Morrison go up and down completely randomly.

Pair Corralation between MCEWEN MINING and Taylor Morrison

Assuming the 90 days horizon MCEWEN MINING INC is expected to under-perform the Taylor Morrison. In addition to that, MCEWEN MINING is 1.7 times more volatile than Taylor Morrison Home. It trades about -0.05 of its total potential returns per unit of risk. Taylor Morrison Home is currently generating about 0.03 per unit of volatility. If you would invest  5,350  in Taylor Morrison Home on September 24, 2024 and sell it today you would earn a total of  300.00  from holding Taylor Morrison Home or generate 5.61% 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.  Taylor Morrison Home

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.

Taylor Morrison Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taylor Morrison Home has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with MCEWEN MINING and Taylor Morrison

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

The idea behind MCEWEN MINING INC and Taylor Morrison Home 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 CEOs Directory module to screen CEOs from public companies around the world.