Correlation Between Apple and Mako Mining
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Mako Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Mako Mining Corp, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Mako Mining.
Diversification Opportunities for Apple and Mako Mining
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Mako is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Apple 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 Apple 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 Apple 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 Apple i.e., Apple and Mako Mining go up and down completely randomly.
Pair Corralation between Apple and Mako Mining
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Mako Mining. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.91 times less risky than Mako Mining. The stock trades about -0.08 of its potential returns per unit of risk. The Mako Mining Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 232.00 in Mako Mining Corp on November 3, 2024 and sell it today you would earn a total of 31.00 from holding Mako Mining Corp or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Mako Mining Corp
Performance |
| Timeline |
| Apple Inc |
| Mako Mining Corp |
Apple and Mako Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Mako Mining
The main advantage of trading using opposite Apple and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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 Apple 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.| Mako Mining vs. Labrador Gold Corp | Mako Mining vs. Exploits Discovery Corp | Mako Mining vs. Puma Exploration | Mako Mining vs. White Gold Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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