Correlation Between Gatos Silver and Mako Mining
Can any of the company-specific risk be diversified away by investing in both Gatos Silver 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 Gatos Silver and Mako Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gatos Silver and Mako Mining Corp, you can compare the effects of market volatilities on Gatos Silver 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 Gatos Silver with a short position of Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and Mako Mining.
Diversification Opportunities for Gatos Silver and Mako Mining
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gatos and Mako is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver 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 Gatos Silver 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 Gatos Silver 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 Gatos Silver i.e., Gatos Silver and Mako Mining go up and down completely randomly.
Pair Corralation between Gatos Silver and Mako Mining
Assuming the 90 days trading horizon Gatos Silver is expected to generate 1.63 times more return on investment than Mako Mining. However, Gatos Silver is 1.63 times more volatile than Mako Mining Corp. It trades about 0.07 of its potential returns per unit of risk. Mako Mining Corp is currently generating about -0.02 per unit of risk. If you would invest 1,645 in Gatos Silver on September 1, 2024 and sell it today you would earn a total of 532.00 from holding Gatos Silver or generate 32.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gatos Silver vs. Mako Mining Corp
Performance |
| Timeline |
| Gatos Silver |
| Mako Mining Corp |
Gatos Silver and Mako Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gatos Silver and Mako Mining
The main advantage of trading using opposite Gatos Silver and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatos Silver 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.| Gatos Silver vs. SilverCrest Metals | Gatos Silver vs. Reyna Silver Corp | Gatos Silver vs. New Pacific Metals | Gatos Silver vs. GoGold Resources |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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