Correlation Between MCEWEN MINING and Calibre Mining

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

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

Diversification Opportunities for MCEWEN MINING and Calibre Mining

0.62

Correlation Coefficient

MCEWEN MINING  Calibre Mining

Poor diversification

The 3 months correlation between MCEWEN and Calibre is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp 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 INC are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Calibre Mining go up and down completely randomly.

Pair Corralation between MCEWEN MINING and Calibre Mining

Assuming the 90 days horizon MCEWEN MINING is expected to generate 11.26 times less return on investment than Calibre Mining. In addition to that, MCEWEN MINING is 1.34 times more volatile than Calibre Mining Corp. It trades about 0.01 of its total potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.08 per unit of volatility. If you would invest  149.00  in Calibre Mining Corp on September 3, 2024 and sell it today you would earn a total of  19.00  from holding Calibre Mining Corp or generate 12.75% return on investment over 90 days.

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

MCEWEN MINING INC  vs.  Calibre Mining Corp

MCEWEN MINING INC

Risk-Adjusted Performance

0 of 100

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 nearly stable basic indicators, MCEWEN MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Calibre Mining Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp 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, Calibre Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MCEWEN MINING and Calibre Mining

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

The idea behind MCEWEN MINING INC and Calibre Mining Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.