Correlation Between Mako Mining and Precious Metals

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

Diversification Opportunities for Mako Mining and Precious Metals

0.58

Correlation Coefficient

Mako Mining  Precious Metals

Very weak diversification

The 3 months correlation between Mako and Precious is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Mako Mining i.e., Mako Mining and Precious Metals go up and down completely randomly.

Pair Corralation between Mako Mining and Precious Metals

Assuming the 90 days horizon Mako Mining Corp is expected to generate 1.93 times more return on investment than Precious Metals. However, Mako Mining is 1.93 times more volatile than Precious Metals And. It trades about 0.15 of its potential returns per unit of risk. Precious Metals And is currently generating about -0.1 per unit of risk. If you would invest  304.00  in Mako Mining Corp on October 4, 2024 and sell it today you would earn a total of  31.00  from holding Mako Mining Corp or generate 10.2% return on investment over 90 days.

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

Mako Mining Corp  vs.  Precious Metals And

Mako Mining Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mako Mining Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Mako Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Precious Metals And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Precious Metals And has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Precious Metals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mako Mining and Precious Metals

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

The idea behind Mako Mining Corp and Precious Metals And 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.