Correlation Between Goldbank Mining and Mako Mining

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

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

Diversification Opportunities for Goldbank Mining and Mako Mining

0.08

Correlation Coefficient

Goldbank Mining  Mako Mining

Significant diversification

The 3 months correlation between Goldbank and Mako is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Goldbank Mining 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 Goldbank 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 Goldbank Mining 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 Goldbank Mining i.e., Goldbank Mining and Mako Mining go up and down completely randomly.

Pair Corralation between Goldbank Mining and Mako Mining

Assuming the 90 days horizon Goldbank Mining Corp is expected to under-perform the Mako Mining. In addition to that, Goldbank Mining is 2.74 times more volatile than Mako Mining Corp. It trades about -0.21 of its total potential returns per unit of risk. Mako Mining Corp is currently generating about -0.13 per unit of volatility. If you would invest  300.00  in Mako Mining Corp on September 27, 2024 and sell it today you would lose (15.00) from holding Mako Mining Corp or give up 5.0% of portfolio value over 90 days.

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

Goldbank Mining Corp  vs.  Mako Mining Corp

Goldbank Mining Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldbank Mining Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Goldbank Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Mako Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mako Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Goldbank Mining and Mako Mining

The main advantage of trading using opposite Goldbank Mining and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldbank Mining 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 Goldbank Mining 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.