Correlation Between Advent Wireless and Mako Mining

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

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

Diversification Opportunities for Advent Wireless and Mako Mining

-0.07

Correlation Coefficient

Advent Wireless  Mako Mining

Good diversification

The 3 months correlation between Advent and Mako is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Advent Wireless and Mako Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mako Mining Corp and Advent Wireless 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 Advent Wireless are associated (or correlated) with Mako Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mako Mining Corp has no effect on the direction of Advent Wireless i.e., Advent Wireless and Mako Mining go up and down completely randomly.

Pair Corralation between Advent Wireless and Mako Mining

Assuming the 90 days horizon Advent Wireless is expected to under-perform the Mako Mining. In addition to that, Advent Wireless is 1.32 times more volatile than Mako Mining Corp. It trades about -0.22 of its total potential returns per unit of risk. Mako Mining Corp is currently generating about 0.14 per unit of volatility. If you would invest  304.00  in Mako Mining Corp on October 4, 2024 and sell it today you would earn a total of  31.00  from holding Mako Mining Corp or generate 10.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Advent Wireless  vs.  Mako Mining Corp

Advent Wireless

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Wireless are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Advent Wireless may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mako Mining Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mako Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Mako Mining is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Advent Wireless and Mako Mining

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

The idea behind Advent Wireless and Mako 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.