Correlation Between McEwen Mining and Jacquet Metal

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

By analyzing existing cross correlation between McEwen Mining and Jacquet Metal Service, you can compare the effects of market volatilities on McEwen Mining and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Jacquet Metal.

Diversification Opportunities for McEwen Mining and Jacquet Metal

0.4

Correlation Coefficient

McEwen Mining  Jacquet Metal

Very weak diversification

The 3 months correlation between McEwen and Jacquet is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 are associated (or correlated) with Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of McEwen Mining i.e., McEwen Mining and Jacquet Metal go up and down completely randomly.

Pair Corralation between McEwen Mining and Jacquet Metal

Assuming the 90 days trading horizon McEwen Mining is expected to under-perform the Jacquet Metal. In addition to that, McEwen Mining is 1.95 times more volatile than Jacquet Metal Service. It trades about -0.04 of its total potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.15 per unit of volatility. If you would invest  1,431  in Jacquet Metal Service on September 12, 2024 and sell it today you would earn a total of  234.00  from holding Jacquet Metal Service or generate 16.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

McEwen Mining  vs.  Jacquet Metal Service

McEwen Mining

Risk-Adjusted Performance

0 of 100

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 unsteady 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.

Jacquet Metal Service

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Jacquet Metal unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with McEwen Mining and Jacquet Metal

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

The idea behind McEwen Mining and Jacquet Metal Service 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.