Correlation Between Arbor Metals and Mako Mining
Can any of the company-specific risk be diversified away by investing in both Arbor Metals 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 Arbor Metals and Mako Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Metals Corp and Mako Mining Corp, you can compare the effects of market volatilities on Arbor Metals 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 Arbor Metals with a short position of Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Metals and Mako Mining.
Diversification Opportunities for Arbor Metals and Mako Mining
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arbor and Mako is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Metals Corp 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 Arbor Metals 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 Arbor Metals Corp 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 Arbor Metals i.e., Arbor Metals and Mako Mining go up and down completely randomly.
Pair Corralation between Arbor Metals and Mako Mining
Assuming the 90 days horizon Arbor Metals Corp is expected to under-perform the Mako Mining. In addition to that, Arbor Metals is 1.11 times more volatile than Mako Mining Corp. It trades about -0.07 of its total potential returns per unit of risk. Mako Mining Corp is currently generating about -0.07 per unit of volatility. If you would invest 316.00 in Mako Mining Corp on August 30, 2024 and sell it today you would lose (14.00) from holding Mako Mining Corp or give up 4.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Metals Corp vs. Mako Mining Corp
Performance |
| Timeline |
| Arbor Metals Corp |
| Mako Mining Corp |
Arbor Metals and Mako Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Metals and Mako Mining
The main advantage of trading using opposite Arbor Metals and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Metals 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.| Arbor Metals vs. First Majestic Silver | Arbor Metals vs. Ivanhoe Energy | Arbor Metals vs. Orezone Gold Corp | Arbor Metals vs. Faraday Copper Corp |
| Mako Mining vs. Thor Explorations | Mako Mining vs. K2 Gold | Mako Mining vs. Loncor Resources | Mako Mining vs. Sarama Resource |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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