Correlation Between Slate Grocery and Mako Mining

Can any of the company-specific risk be diversified away by investing in both Slate Grocery and Mako Mining 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 Slate Grocery and Mako Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Slate Grocery REIT and Mako Mining Corp, you can compare the effects of market volatilities on Slate Grocery and Mako Mining 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 Slate Grocery with a short position of Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Slate Grocery and Mako Mining.

Diversification Opportunities for Slate Grocery and Mako Mining

-0.22

Correlation Coefficient

Slate Grocery  Mako Mining

Very good diversification

The 3 months correlation between Slate and Mako is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Slate Grocery REIT and Mako Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mako Mining Corp and Slate Grocery 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 Slate Grocery REIT are associated (or correlated) with Mako Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mako Mining Corp has no effect on the direction of Slate Grocery i.e., Slate Grocery and Mako Mining go up and down completely randomly.

Pair Corralation between Slate Grocery and Mako Mining

Assuming the 90 days trading horizon Slate Grocery REIT is expected to under-perform the Mako Mining. But the stock apears to be less risky and, when comparing its historical volatility, Slate Grocery REIT is 3.32 times less risky than Mako Mining. The stock trades about -0.39 of its potential returns per unit of risk. The Mako Mining Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  296.00  in Mako Mining Corp on October 9, 2024 and sell it today you would earn a total of  62.00  from holding Mako Mining Corp or generate 20.95% return on investment over 90 days.

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

Slate Grocery REIT  vs.  Mako Mining Corp

Slate Grocery REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Slate Grocery REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Slate Grocery is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Mako Mining Corp

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mako Mining Corp are ranked lower than 7 (%) 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.

Pair Trading with Slate Grocery and Mako Mining

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

The idea behind Slate Grocery REIT and Mako Mining Corp 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.