Correlation Between MCEWEN MINING and Vestas Wind

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

Diversification Opportunities for MCEWEN MINING and Vestas Wind

-0.38

Correlation Coefficient

MCEWEN MINING  Vestas Wind

Very good diversification

The 3 months correlation between MCEWEN and Vestas is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems 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 Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Vestas Wind go up and down completely randomly.

Pair Corralation between MCEWEN MINING and Vestas Wind

Assuming the 90 days horizon MCEWEN MINING INC is expected to generate 1.21 times more return on investment than Vestas Wind. However, MCEWEN MINING is 1.21 times more volatile than Vestas Wind Systems. It trades about 0.02 of its potential returns per unit of risk. Vestas Wind Systems is currently generating about -0.01 per unit of risk. If you would invest  745.00  in MCEWEN MINING INC on December 31, 2024 and sell it today you would earn a total of  5.00  from holding MCEWEN MINING INC or generate 0.67% 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.  Vestas Wind Systems

MCEWEN MINING INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MCEWEN MINING INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MCEWEN MINING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Vestas Wind Systems

Risk-Adjusted Performance

Weak

Over the last 90 days Vestas Wind Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Vestas Wind is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MCEWEN MINING and Vestas Wind

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

The idea behind MCEWEN MINING INC and Vestas Wind Systems 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.