Correlation Between Forstrong Global and Mako Mining
Can any of the company-specific risk be diversified away by investing in both Forstrong Global 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 Forstrong Global and Mako Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forstrong Global Income and Mako Mining Corp, you can compare the effects of market volatilities on Forstrong Global 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 Forstrong Global with a short position of Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forstrong Global and Mako Mining.
Diversification Opportunities for Forstrong Global and Mako Mining
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Forstrong and Mako is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Global Income 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 Forstrong Global 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 Forstrong Global Income 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 Forstrong Global i.e., Forstrong Global and Mako Mining go up and down completely randomly.
Pair Corralation between Forstrong Global and Mako Mining
Assuming the 90 days trading horizon Forstrong Global is expected to generate 9.11 times less return on investment than Mako Mining. But when comparing it to its historical volatility, Forstrong Global Income is 17.48 times less risky than Mako Mining. It trades about 0.11 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 140.00 in Mako Mining Corp on August 28, 2024 and sell it today you would earn a total of 164.00 from holding Mako Mining Corp or generate 117.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 65.99% |
| Values | Daily Returns |
Forstrong Global Income vs. Mako Mining Corp
Performance |
| Timeline |
| Forstrong Global Income |
| Mako Mining Corp |
Forstrong Global and Mako Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forstrong Global and Mako Mining
The main advantage of trading using opposite Forstrong Global and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Global 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.| Forstrong Global vs. iShares SPTSX 60 | Forstrong Global vs. iShares Core SP | Forstrong Global vs. iShares Core SPTSX | Forstrong Global vs. BMO Aggregate Bond |
| Mako Mining vs. First Majestic Silver | Mako Mining vs. Ivanhoe Energy | Mako Mining vs. Orezone 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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