Correlation Between Mako Mining and Broadcom

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

Diversification Opportunities for Mako Mining and Broadcom

-0.55

Correlation Coefficient

Mako Mining  Broadcom

Excellent diversification

The 3 months correlation between Mako and Broadcom is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Broadcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadcom 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 Broadcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadcom has no effect on the direction of Mako Mining i.e., Mako Mining and Broadcom go up and down completely randomly.

Pair Corralation between Mako Mining and Broadcom

Assuming the 90 days horizon Mako Mining Corp is expected to generate 0.9 times more return on investment than Broadcom. However, Mako Mining Corp is 1.11 times less risky than Broadcom. It trades about 0.19 of its potential returns per unit of risk. Broadcom is currently generating about -0.13 per unit of risk. If you would invest  280.00  in Mako Mining Corp on December 30, 2024 and sell it today you would earn a total of  123.00  from holding Mako Mining Corp or generate 43.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mako Mining Corp  vs.  Broadcom

Mako Mining Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mako Mining Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Mako Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Broadcom

Risk-Adjusted Performance

Very Weak

Over the last 90 days Broadcom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Mako Mining and Broadcom

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

The idea behind Mako Mining Corp and Broadcom 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.