Correlation Between Mako Mining and GMO Internet
Can any of the company-specific risk be diversified away by investing in both Mako Mining and GMO Internet 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 Mako Mining and GMO Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mako Mining Corp and GMO Internet, you can compare the effects of market volatilities on Mako Mining and GMO Internet 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 Mako Mining with a short position of GMO Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and GMO Internet.
Diversification Opportunities for Mako Mining and GMO Internet
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mako and GMO is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and GMO Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMO Internet and Mako 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 Mako Mining Corp are associated (or correlated) with GMO Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMO Internet has no effect on the direction of Mako Mining i.e., Mako Mining and GMO Internet go up and down completely randomly.
Pair Corralation between Mako Mining and GMO Internet
Assuming the 90 days horizon Mako Mining Corp is expected to generate 17.95 times more return on investment than GMO Internet. However, Mako Mining is 17.95 times more volatile than GMO Internet. It trades about 0.2 of its potential returns per unit of risk. GMO Internet is currently generating about 0.22 per unit of risk. If you would invest 232.00 in Mako Mining Corp on November 3, 2024 and sell it today you would earn a total of 31.00 from holding Mako Mining Corp or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Mako Mining Corp vs. GMO Internet
Performance |
| Timeline |
| Mako Mining Corp |
| GMO Internet |
Mako Mining and GMO Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mako Mining and GMO Internet
The main advantage of trading using opposite Mako Mining and GMO Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, GMO Internet 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 GMO Internet will offset losses from the drop in GMO Internet's long position.| Mako Mining vs. Labrador Gold Corp | Mako Mining vs. Exploits Discovery Corp | Mako Mining vs. Puma Exploration | Mako Mining vs. White Gold Corp |
| GMO Internet vs. Cable One | GMO Internet vs. Charter Communications | GMO Internet vs. Frontier Communications Parent | GMO Internet vs. Liberty Broadband Srs |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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