Correlation Between McEwen Mining and Liontrust Asset

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

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

Diversification Opportunities for McEwen Mining and Liontrust Asset

0.29

Correlation Coefficient

McEwen Mining  Liontrust Asset

Modest diversification

The 3 months correlation between McEwen and Liontrust is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana 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 Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of McEwen Mining i.e., McEwen Mining and Liontrust Asset go up and down completely randomly.

Pair Corralation between McEwen Mining and Liontrust Asset

Assuming the 90 days trading horizon McEwen Mining is expected to generate 1.32 times more return on investment than Liontrust Asset. However, McEwen Mining is 1.32 times more volatile than Liontrust Asset Management. It trades about -0.06 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about -0.1 per unit of risk. If you would invest  922.00  in McEwen Mining on September 21, 2024 and sell it today you would lose (134.00) from holding McEwen Mining or give up 14.53% of portfolio value over 90 days.

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

McEwen Mining  vs.  Liontrust Asset Management

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.

Liontrust Asset Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liontrust Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with McEwen Mining and Liontrust Asset

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

The idea behind McEwen Mining and Liontrust Asset Management 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.