Correlation Between Element Fleet and Mako Mining
Can any of the company-specific risk be diversified away by investing in both Element Fleet 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 Element Fleet and Mako Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Element Fleet Management and Mako Mining Corp, you can compare the effects of market volatilities on Element Fleet 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 Element Fleet with a short position of Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Element Fleet and Mako Mining.
Diversification Opportunities for Element Fleet and Mako Mining
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Element and Mako is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management 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 Element Fleet 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 Element Fleet Management 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 Element Fleet i.e., Element Fleet and Mako Mining go up and down completely randomly.
Pair Corralation between Element Fleet and Mako Mining
Assuming the 90 days trading horizon Element Fleet is expected to generate 2.51 times less return on investment than Mako Mining. But when comparing it to its historical volatility, Element Fleet Management is 3.33 times less risky than Mako Mining. It trades about 0.08 of its potential returns per unit of risk. Mako Mining Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Mako Mining Corp on August 30, 2024 and sell it today you would earn a total of 172.00 from holding Mako Mining Corp or generate 132.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Element Fleet Management vs. Mako Mining Corp
Performance |
| Timeline |
| Element Fleet Management |
| Mako Mining Corp |
Element Fleet and Mako Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Element Fleet and Mako Mining
The main advantage of trading using opposite Element Fleet and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Fleet 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.| Element Fleet vs. ECN Capital Corp | Element Fleet vs. Martinrea International | Element Fleet vs. CCL Industries | Element Fleet vs. FirstService 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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