Correlation Between Evolution Mining and MCEWEN MINING

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Can any of the company-specific risk be diversified away by investing in both Evolution Mining 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 Evolution Mining and MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Mining Limited and MCEWEN MINING INC, you can compare the effects of market volatilities on Evolution Mining 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 Evolution Mining with a short position of MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Mining and MCEWEN MINING.

Diversification Opportunities for Evolution Mining and MCEWEN MINING

0.41
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Evolution and MCEWEN is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Mining Limited and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC and Evolution 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 Evolution Mining Limited 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 INC has no effect on the direction of Evolution Mining i.e., Evolution Mining and MCEWEN MINING go up and down completely randomly.

Pair Corralation between Evolution Mining and MCEWEN MINING

Assuming the 90 days horizon Evolution Mining Limited is expected to under-perform the MCEWEN MINING. But the stock apears to be less risky and, when comparing its historical volatility, Evolution Mining Limited is 1.53 times less risky than MCEWEN MINING. The stock trades about -0.12 of its potential returns per unit of risk. The MCEWEN MINING INC is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  820.00  in MCEWEN MINING INC on September 23, 2024 and sell it today you would lose (55.00) from holding MCEWEN MINING INC or give up 6.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Evolution Mining Limited  vs.  MCEWEN MINING INC

 Performance 
       Timeline  
Evolution Mining 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Evolution Mining Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Evolution Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.
MCEWEN MINING INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

Evolution Mining and MCEWEN MINING Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Evolution Mining and MCEWEN MINING

The main advantage of trading using opposite Evolution Mining and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Mining 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 Evolution Mining Limited and MCEWEN MINING INC 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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