Correlation Between CI Financial and Mako Mining

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

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

Diversification Opportunities for CI Financial and Mako Mining

0.91

Correlation Coefficient

CI Financial  Mako Mining

Almost no diversification

The 3 months correlation between CIX and Mako is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp 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 CI Financial 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 CI Financial Corp 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 CI Financial i.e., CI Financial and Mako Mining go up and down completely randomly.

Pair Corralation between CI Financial and Mako Mining

Assuming the 90 days trading horizon CI Financial is expected to generate 28.15 times less return on investment than Mako Mining. But when comparing it to its historical volatility, CI Financial Corp is 16.78 times less risky than Mako Mining. It trades about 0.13 of its potential returns per unit of risk. Mako Mining Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  272.00  in Mako Mining Corp on December 19, 2024 and sell it today you would earn a total of  133.00  from holding Mako Mining Corp or generate 48.9% return on investment over 90 days.

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

CI Financial Corp  vs.  Mako Mining Corp

CI Financial Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Mako Mining Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mako Mining Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Mako Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CI Financial and Mako Mining

The main advantage of trading using opposite CI Financial and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial 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 CI Financial Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.