Correlation Between Datagroup and McEwen Mining

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

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

Diversification Opportunities for Datagroup and McEwen Mining

-0.29

Correlation Coefficient

Datagroup  McEwen Mining

Very good diversification

The 3 months correlation between Datagroup and McEwen is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Datagroup SE and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and Datagroup 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 Datagroup SE 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 Datagroup i.e., Datagroup and McEwen Mining go up and down completely randomly.

Pair Corralation between Datagroup and McEwen Mining

Assuming the 90 days trading horizon Datagroup SE is expected to generate 0.76 times more return on investment than McEwen Mining. However, Datagroup SE is 1.32 times less risky than McEwen Mining. It trades about 0.13 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.06 per unit of risk. If you would invest  3,930  in Datagroup SE on September 21, 2024 and sell it today you would earn a total of  825.00  from holding Datagroup SE or generate 20.99% return on investment over 90 days.

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

Datagroup SE  vs.  McEwen Mining

Datagroup SE

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Datagroup SE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Datagroup unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Datagroup and McEwen Mining

The main advantage of trading using opposite Datagroup and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datagroup 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 Datagroup SE 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.