Correlation Between Makara Mining and St James
Can any of the company-specific risk be diversified away by investing in both Makara Mining and St James 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 St James 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 St James Gold, you can compare the effects of market volatilities on Makara Mining and St James 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 St James. Check out your portfolio center. Please also check ongoing floating volatility patterns of Makara Mining and St James.
Diversification Opportunities for Makara Mining and St James
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Makara and LRDJF is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Makara Mining Corp and St James Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St James Gold 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 St James. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St James Gold has no effect on the direction of Makara Mining i.e., Makara Mining and St James go up and down completely randomly.
Pair Corralation between Makara Mining and St James
Assuming the 90 days horizon Makara Mining Corp is expected to generate 2.57 times more return on investment than St James. However, Makara Mining is 2.57 times more volatile than St James Gold. It trades about 0.09 of its potential returns per unit of risk. St James Gold is currently generating about 0.03 per unit of risk. If you would invest 10.00 in Makara Mining Corp on September 12, 2024 and sell it today you would lose (1.20) from holding Makara Mining Corp or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Makara Mining Corp vs. St James Gold
Performance |
| Timeline |
| Makara Mining Corp |
| St James Gold |
Makara Mining and St James Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Makara Mining and St James
The main advantage of trading using opposite Makara Mining and St James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Makara Mining position performs unexpectedly, St James 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 St James will offset losses from the drop in St James' long position.| Makara Mining vs. Revival Gold | Makara Mining vs. Galiano Gold | Makara Mining vs. US Gold Corp | Makara Mining vs. HUMANA INC |
| St James vs. Puma Exploration | St James vs. Sixty North Gold | St James vs. Red Pine Exploration | St James vs. Grande Portage Resources |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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