Correlation Between Vox Royalty and McEwen Mining

Can any of the company-specific risk be diversified away by investing in both Vox Royalty and McEwen Mining 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 Vox Royalty and McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vox Royalty Corp and McEwen Mining, you can compare the effects of market volatilities on Vox Royalty and McEwen Mining 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 Vox Royalty with a short position of McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vox Royalty and McEwen Mining.

Diversification Opportunities for Vox Royalty and McEwen Mining

0.34

Correlation Coefficient

Vox Royalty  McEwen Mining

Weak diversification

The 3 months correlation between Vox and McEwen is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vox Royalty Corp and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Vox Royalty 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 Vox Royalty Corp are associated (or correlated) with McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Vox Royalty i.e., Vox Royalty and McEwen Mining go up and down completely randomly.

Pair Corralation between Vox Royalty and McEwen Mining

Given the investment horizon of 90 days Vox Royalty Corp is expected to generate 0.76 times more return on investment than McEwen Mining. However, Vox Royalty Corp is 1.31 times less risky than McEwen Mining. It trades about -0.04 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.05 per unit of risk. If you would invest  264.00  in Vox Royalty Corp on November 28, 2024 and sell it today you would lose (23.00) from holding Vox Royalty Corp or give up 8.71% of portfolio value over 90 days.

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

Vox Royalty Corp  vs.  McEwen Mining

Vox Royalty Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vox Royalty Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

McEwen Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days McEwen Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Vox Royalty and McEwen Mining

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

The idea behind Vox Royalty Corp and McEwen Mining 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.