Correlation Between Makara Mining and Contact Gold
Can any of the company-specific risk be diversified away by investing in both Makara Mining and Contact Gold 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 Makara Mining and Contact Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Makara Mining Corp and Contact Gold Corp, you can compare the effects of market volatilities on Makara Mining and Contact Gold 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 Makara Mining with a short position of Contact Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Makara Mining and Contact Gold.
Diversification Opportunities for Makara Mining and Contact Gold
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Makara and Contact is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Makara Mining Corp and Contact Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contact Gold Corp and Makara 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 Makara Mining Corp are associated (or correlated) with Contact Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contact Gold Corp has no effect on the direction of Makara Mining i.e., Makara Mining and Contact Gold go up and down completely randomly.
Pair Corralation between Makara Mining and Contact Gold
Assuming the 90 days horizon Makara Mining Corp is expected to generate 1.81 times more return on investment than Contact Gold. However, Makara Mining is 1.81 times more volatile than Contact Gold Corp. It trades about 0.09 of its potential returns per unit of risk. Contact Gold Corp is currently generating about 0.03 per unit of risk. If you would invest 14.00 in Makara Mining Corp on September 5, 2024 and sell it today you would lose (5.00) from holding Makara Mining Corp or give up 35.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 29.35% |
| Values | Daily Returns |
Makara Mining Corp vs. Contact Gold Corp
Performance |
| Timeline |
| Makara Mining Corp |
| Contact Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Makara Mining and Contact Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Makara Mining and Contact Gold
The main advantage of trading using opposite Makara Mining and Contact Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Makara Mining position performs unexpectedly, Contact Gold 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 Contact Gold will offset losses from the drop in Contact Gold's long position.| Makara Mining vs. Harmony Gold Mining | Makara Mining vs. SPACE | Makara Mining vs. T Rowe Price | Makara Mining vs. Ampleforth |
| Contact Gold vs. Fremont Gold | Contact Gold vs. Norsemont Mining | Contact Gold vs. Hummingbird Resources PLC | Contact Gold vs. Tudor 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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