Correlation Between Everus Construction and Mako Mining

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

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

Diversification Opportunities for Everus Construction and Mako Mining

-0.27

Correlation Coefficient

Everus Construction  Mako Mining

Very good diversification

The 3 months correlation between Everus and Mako is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Everus Construction Group 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 Everus Construction 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 Everus Construction Group 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 Everus Construction i.e., Everus Construction and Mako Mining go up and down completely randomly.

Pair Corralation between Everus Construction and Mako Mining

Considering the 90-day investment horizon Everus Construction is expected to generate 9.6 times less return on investment than Mako Mining. But when comparing it to its historical volatility, Everus Construction Group is 1.31 times less risky than Mako Mining. It trades about 0.03 of its potential returns per unit of risk. Mako Mining Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  213.00  in Mako Mining Corp on October 11, 2024 and sell it today you would earn a total of  36.00  from holding Mako Mining Corp or generate 16.9% return on investment over 90 days.

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

Everus Construction Group  vs.  Mako Mining Corp

Everus Construction

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Everus Construction Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Everus Construction reported solid returns over the last few months and may actually be approaching a breakup point.

Mako Mining Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mako Mining Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mako Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Everus Construction and Mako Mining

The main advantage of trading using opposite Everus Construction and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everus Construction 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 Everus Construction Group 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.