Correlation Between MCEWEN MINING and Aluminum

Can any of the company-specific risk be diversified away by investing in both MCEWEN MINING and Aluminum 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 Aluminum 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 Aluminum of, you can compare the effects of market volatilities on MCEWEN MINING and Aluminum 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 Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCEWEN MINING and Aluminum.

Diversification Opportunities for MCEWEN MINING and Aluminum

0.85

Correlation Coefficient

MCEWEN MINING  Aluminum

Very poor diversification

The 3 months correlation between MCEWEN and Aluminum is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding MCEWEN MINING INC and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum 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 Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum has no effect on the direction of MCEWEN MINING i.e., MCEWEN MINING and Aluminum go up and down completely randomly.

Pair Corralation between MCEWEN MINING and Aluminum

Assuming the 90 days horizon MCEWEN MINING is expected to generate 1.07 times less return on investment than Aluminum. In addition to that, MCEWEN MINING is 1.35 times more volatile than Aluminum of. It trades about 0.17 of its total potential returns per unit of risk. Aluminum of is currently generating about 0.25 per unit of volatility. If you would invest  46.00  in Aluminum of on May 4, 2025 and sell it today you would earn a total of  22.00  from holding Aluminum of or generate 47.83% return on investment over 90 days.

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

MCEWEN MINING INC  vs.  Aluminum of

MCEWEN MINING INC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MCEWEN MINING INC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MCEWEN MINING reported solid returns over the last few months and may actually be approaching a breakup point.

Aluminum

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aluminum of are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Aluminum reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MCEWEN MINING and Aluminum

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

The idea behind MCEWEN MINING INC and Aluminum of 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.