Correlation Between MCEWEN MINING and AUSTEVOLL SEAFOOD

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

Diversification Opportunities for MCEWEN MINING and AUSTEVOLL SEAFOOD

-0.1

Correlation Coefficient

MCEWEN MINING  AUSTEVOLL SEAFOOD

Good diversification

The 3 months correlation between MCEWEN and AUSTEVOLL is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and AUSTEVOLL SEAFOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSTEVOLL SEAFOOD has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and AUSTEVOLL SEAFOOD go up and down completely randomly.

Pair Corralation between MCEWEN MINING and AUSTEVOLL SEAFOOD

Assuming the 90 days horizon MCEWEN MINING INC is expected to under-perform the AUSTEVOLL SEAFOOD. In addition to that, MCEWEN MINING is 2.48 times more volatile than AUSTEVOLL SEAFOOD. It trades about -0.17 of its total potential returns per unit of risk. AUSTEVOLL SEAFOOD is currently generating about -0.02 per unit of volatility. If you would invest  821.00  in AUSTEVOLL SEAFOOD on September 23, 2024 and sell it today you would lose (12.00) from holding AUSTEVOLL SEAFOOD or give up 1.46% of portfolio value over 90 days.

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

MCEWEN MINING INC  vs.  AUSTEVOLL SEAFOOD

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.

AUSTEVOLL SEAFOOD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AUSTEVOLL SEAFOOD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AUSTEVOLL SEAFOOD is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MCEWEN MINING and AUSTEVOLL SEAFOOD

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

The idea behind MCEWEN MINING INC and AUSTEVOLL SEAFOOD 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.