Correlation Between Mach7 Technologies and Santana Minerals

Can any of the company-specific risk be diversified away by investing in both Mach7 Technologies and Santana Minerals 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 Mach7 Technologies and Santana Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mach7 Technologies and Santana Minerals, you can compare the effects of market volatilities on Mach7 Technologies and Santana Minerals 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 Mach7 Technologies with a short position of Santana Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mach7 Technologies and Santana Minerals.

Diversification Opportunities for Mach7 Technologies and Santana Minerals

0.73

Correlation Coefficient

Mach7 Technologies  Santana Minerals

Poor diversification

The 3 months correlation between Mach7 and Santana is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mach7 Technologies and Santana Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santana Minerals and Mach7 Technologies 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 Mach7 Technologies are associated (or correlated) with Santana Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santana Minerals has no effect on the direction of Mach7 Technologies i.e., Mach7 Technologies and Santana Minerals go up and down completely randomly.

Pair Corralation between Mach7 Technologies and Santana Minerals

Assuming the 90 days trading horizon Mach7 Technologies is expected to generate 1.59 times less return on investment than Santana Minerals. In addition to that, Mach7 Technologies is 1.02 times more volatile than Santana Minerals. It trades about 0.06 of its total potential returns per unit of risk. Santana Minerals is currently generating about 0.1 per unit of volatility. If you would invest  46.00  in Santana Minerals on December 22, 2024 and sell it today you would earn a total of  10.00  from holding Santana Minerals or generate 21.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Mach7 Technologies  vs.  Santana Minerals

Mach7 Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mach7 Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mach7 Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Santana Minerals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Santana Minerals are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Santana Minerals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mach7 Technologies and Santana Minerals

The main advantage of trading using opposite Mach7 Technologies and Santana Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mach7 Technologies position performs unexpectedly, Santana Minerals 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 Santana Minerals will offset losses from the drop in Santana Minerals' long position.

The idea behind Mach7 Technologies and Santana Minerals 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.