Correlation Between American Hotel and Mako Mining
Can any of the company-specific risk be diversified away by investing in both American Hotel 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 American Hotel and Mako Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Mako Mining Corp, you can compare the effects of market volatilities on American Hotel 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 American Hotel with a short position of Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Mako Mining.
Diversification Opportunities for American Hotel and Mako Mining
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Mako is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel 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 American Hotel 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 American Hotel 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 American Hotel i.e., American Hotel and Mako Mining go up and down completely randomly.
Pair Corralation between American Hotel and Mako Mining
Assuming the 90 days trading horizon American Hotel Income is expected to under-perform the Mako Mining. In addition to that, American Hotel is 1.13 times more volatile than Mako Mining Corp. It trades about -0.04 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 110.00 in Mako Mining Corp on September 3, 2024 and sell it today you would earn a total of 194.00 from holding Mako Mining Corp or generate 176.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.93% |
| Values | Daily Returns |
American Hotel Income vs. Mako Mining Corp
Performance |
| Timeline |
| American Hotel Income |
| Mako Mining Corp |
American Hotel and Mako Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Mako Mining
The main advantage of trading using opposite American Hotel and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel 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.| American Hotel vs. KDA Group | American Hotel vs. BMO Aggregate Bond | American Hotel vs. Terreno Resources Corp | American Hotel vs. iShares Canadian HYBrid |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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