Correlation Between PPHE Hotel and McEwen Mining

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

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

Diversification Opportunities for PPHE Hotel and McEwen Mining

-0.3

Correlation Coefficient

PPHE Hotel  McEwen Mining

Very good diversification

The 3 months correlation between PPHE and McEwen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining and PPHE Hotel 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 PPHE Hotel Group 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 PPHE Hotel i.e., PPHE Hotel and McEwen Mining go up and down completely randomly.

Pair Corralation between PPHE Hotel and McEwen Mining

Assuming the 90 days trading horizon PPHE Hotel Group is expected to generate 0.49 times more return on investment than McEwen Mining. However, PPHE Hotel Group is 2.05 times less risky than McEwen Mining. It trades about 0.09 of its potential returns per unit of risk. McEwen Mining is currently generating about -0.06 per unit of risk. If you would invest  124,000  in PPHE Hotel Group on September 21, 2024 and sell it today you would earn a total of  10,500  from holding PPHE Hotel Group or generate 8.47% return on investment over 90 days.

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

PPHE Hotel Group  vs.  McEwen Mining

PPHE Hotel Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PPHE Hotel Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, PPHE Hotel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 PPHE Hotel and McEwen Mining

The main advantage of trading using opposite PPHE Hotel and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel 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 PPHE Hotel Group 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.