Correlation Between DOLLAR and Mako Mining

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

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

Diversification Opportunities for DOLLAR and Mako Mining

-0.32

Correlation Coefficient

DOLLAR  Mako Mining

Very good diversification

The 3 months correlation between DOLLAR and Mako is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding DOLLAR TREE INC 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 DOLLAR 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 DOLLAR TREE INC 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 DOLLAR i.e., DOLLAR and Mako Mining go up and down completely randomly.

Pair Corralation between DOLLAR and Mako Mining

Assuming the 90 days trading horizon DOLLAR TREE INC is expected to under-perform the Mako Mining. But the bond apears to be less risky and, when comparing its historical volatility, DOLLAR TREE INC is 15.43 times less risky than Mako Mining. The bond trades about -0.07 of its potential returns per unit of risk. The Mako Mining Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  217.00  in Mako Mining Corp on October 26, 2024 and sell it today you would earn a total of  19.00  from holding Mako Mining Corp or generate 8.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.12%
Values	Daily Returns

DOLLAR TREE INC  vs.  Mako Mining Corp

DOLLAR TREE INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mako Mining Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mako Mining Corp are ranked lower than 3 (%) 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.

Pair Trading with DOLLAR and Mako Mining

The main advantage of trading using opposite DOLLAR and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOLLAR 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 DOLLAR TREE INC 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.