Correlation Between Mako Mining and Walmart

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

Diversification Opportunities for Mako Mining and Walmart

-0.52

Correlation Coefficient

Mako Mining  Walmart

Excellent diversification

The 3 months correlation between Mako and Walmart is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Walmart Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart Inc CDR 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart Inc CDR has no effect on the direction of Mako Mining i.e., Mako Mining and Walmart go up and down completely randomly.

Pair Corralation between Mako Mining and Walmart

Assuming the 90 days horizon Mako Mining Corp is expected to generate 3.4 times more return on investment than Walmart. However, Mako Mining is 3.4 times more volatile than Walmart Inc CDR. It trades about 0.17 of its potential returns per unit of risk. Walmart Inc CDR is currently generating about -0.21 per unit of risk. If you would invest  300.00  in Mako Mining Corp on October 5, 2024 and sell it today you would earn a total of  35.00  from holding Mako Mining Corp or generate 11.67% 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.  Walmart Inc CDR

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 abnormal basic indicators, Mako Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Walmart Inc CDR

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart Inc CDR are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Walmart displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mako Mining and Walmart

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

The idea behind Mako Mining Corp and Walmart Inc CDR 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.