Correlation Between Globex Mining and Mako Mining
Can any of the company-specific risk be diversified away by investing in both Globex Mining 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 Globex Mining and Mako Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and Mako Mining Corp, you can compare the effects of market volatilities on Globex Mining 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 Globex Mining with a short position of Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Mako Mining.
Diversification Opportunities for Globex Mining and Mako Mining
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globex and Mako is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises 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 Globex Mining 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 Globex Mining Enterprises 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 Globex Mining i.e., Globex Mining and Mako Mining go up and down completely randomly.
Pair Corralation between Globex Mining and Mako Mining
Assuming the 90 days trading horizon Globex Mining is expected to generate 1.5 times less return on investment than Mako Mining. But when comparing it to its historical volatility, Globex Mining Enterprises is 1.31 times less risky than Mako Mining. It trades about 0.06 of its potential returns per unit of risk. Mako Mining Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Mako Mining Corp on September 1, 2024 and sell it today you would earn a total of 114.00 from holding Mako Mining Corp or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Mako Mining Corp
Performance |
| Timeline |
| Globex Mining Enterprises |
| Mako Mining Corp |
Globex Mining and Mako Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Mako Mining
The main advantage of trading using opposite Globex Mining and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining 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.| Globex Mining vs. Chibougamau Independent Mines | Globex Mining vs. Entree Resources | Globex Mining vs. Solitario Exploration Royalty | Globex Mining vs. Forsys Metals 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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