Correlation Between Mako Mining and Treasury Metals

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

Diversification Opportunities for Mako Mining and Treasury Metals

0.0

Correlation Coefficient

Mako Mining  Treasury Metals

Pay attention - limited upside

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

Pair Corralation between Mako Mining and Treasury Metals

Assuming the 90 days horizon Mako Mining Corp is expected to generate 0.7 times more return on investment than Treasury Metals. However, Mako Mining Corp is 1.42 times less risky than Treasury Metals. It trades about 0.05 of its potential returns per unit of risk. Treasury Metals is currently generating about 0.01 per unit of risk. If you would invest  140.00  in Mako Mining Corp on October 11, 2024 and sell it today you would earn a total of  109.00  from holding Mako Mining Corp or generate 77.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	74.19%
Values	Daily Returns

Mako Mining Corp  vs.  Treasury Metals

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.

Treasury Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Treasury Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Treasury Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mako Mining and Treasury Metals

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

The idea behind Mako Mining Corp and Treasury Metals 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.