Correlation Between Mako Mining and Suntory Beverage

Can any of the company-specific risk be diversified away by investing in both Mako Mining and Suntory Beverage 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 Suntory Beverage 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 Suntory Beverage Food, you can compare the effects of market volatilities on Mako Mining and Suntory Beverage 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 Suntory Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and Suntory Beverage.

Diversification Opportunities for Mako Mining and Suntory Beverage

-0.15

Correlation Coefficient

Mako Mining  Suntory Beverage

Good diversification

The 3 months correlation between Mako and Suntory is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food 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 Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of Mako Mining i.e., Mako Mining and Suntory Beverage go up and down completely randomly.

Pair Corralation between Mako Mining and Suntory Beverage

Assuming the 90 days horizon Mako Mining Corp is expected to generate 5.1 times more return on investment than Suntory Beverage. However, Mako Mining is 5.1 times more volatile than Suntory Beverage Food. It trades about 0.22 of its potential returns per unit of risk. Suntory Beverage Food is currently generating about -0.37 per unit of risk. If you would invest  196.00  in Mako Mining Corp on October 25, 2024 and sell it today you would earn a total of  33.00  from holding Mako Mining Corp or generate 16.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Mako Mining Corp  vs.  Suntory Beverage Food

Mako Mining Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mako Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Suntory Beverage Food

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Suntory Beverage Food has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Mako Mining and Suntory Beverage

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

The idea behind Mako Mining Corp and Suntory Beverage Food 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.