Correlation Between McEwen Mining and United Airlines

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

By analyzing existing cross correlation between McEwen Mining and United Airlines Holdings, you can compare the effects of market volatilities on McEwen Mining and United Airlines 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 United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and United Airlines.

Diversification Opportunities for McEwen Mining and United Airlines

0.4

Correlation Coefficient

McEwen Mining  United Airlines

Very weak diversification

The 3 months correlation between McEwen and United is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings 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 are associated (or correlated) with United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of McEwen Mining i.e., McEwen Mining and United Airlines go up and down completely randomly.

Pair Corralation between McEwen Mining and United Airlines

Assuming the 90 days trading horizon McEwen Mining is expected to generate 1.05 times more return on investment than United Airlines. However, McEwen Mining is 1.05 times more volatile than United Airlines Holdings. It trades about 0.2 of its potential returns per unit of risk. United Airlines Holdings is currently generating about 0.13 per unit of risk. If you would invest  14,548  in McEwen Mining on April 25, 2025 and sell it today you would earn a total of  7,320  from holding McEwen Mining or generate 50.32% return on investment over 90 days.

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

McEwen Mining  vs.  United Airlines Holdings

McEwen Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in McEwen Mining are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, McEwen Mining showed solid returns over the last few months and may actually be approaching a breakup point.

United Airlines Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United Airlines Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, United Airlines showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with McEwen Mining and United Airlines

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

The idea behind McEwen Mining and United Airlines Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.