Correlation Between Hisense Home and MCEWEN MINING

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

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

Diversification Opportunities for Hisense Home and MCEWEN MINING

0.62

Correlation Coefficient

Hisense Home  MCEWEN MINING

Poor diversification

The 3 months correlation between Hisense and MCEWEN is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hisense Home Appliances and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC and Hisense Home 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 Hisense Home Appliances 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 INC has no effect on the direction of Hisense Home i.e., Hisense Home and MCEWEN MINING go up and down completely randomly.

Pair Corralation between Hisense Home and MCEWEN MINING

Assuming the 90 days horizon Hisense Home Appliances is expected to generate 1.12 times more return on investment than MCEWEN MINING. However, Hisense Home is 1.12 times more volatile than MCEWEN MINING INC. It trades about 0.07 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about 0.01 per unit of risk. If you would invest  98.00  in Hisense Home Appliances on February 2, 2025 and sell it today you would earn a total of  168.00  from holding Hisense Home Appliances or generate 171.43% return on investment over 90 days.

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

Hisense Home Appliances  vs.  MCEWEN MINING INC

Hisense Home Appliances

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hisense Home Appliances has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MCEWEN MINING INC

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Hisense Home and MCEWEN MINING

The main advantage of trading using opposite Hisense Home and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hisense Home 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 Hisense Home Appliances and MCEWEN MINING INC 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.