Correlation Between Mako Mining and California Engels

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

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

Diversification Opportunities for Mako Mining and California Engels

0.0

Correlation Coefficient

Mako Mining  California Engels

Pay attention - limited upside

The 3 months correlation between Mako and California is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and California Engels Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Engels Mining and Mako 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 Mako Mining Corp are associated (or correlated) with California Engels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Engels Mining has no effect on the direction of Mako Mining i.e., Mako Mining and California Engels go up and down completely randomly.

Pair Corralation between Mako Mining and California Engels

If you would invest  198.00  in Mako Mining Corp on October 24, 2024 and sell it today you would earn a total of  30.00  from holding Mako Mining Corp or generate 15.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Mako Mining Corp  vs.  California Engels Mining

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. Despite nearly stable basic indicators, Mako Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

California Engels Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days California Engels Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, California Engels is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mako Mining and California Engels

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

The idea behind Mako Mining Corp and California Engels Mining 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..