Correlation Between Mako Mining and Norsemont Mining
Can any of the company-specific risk be diversified away by investing in both Mako Mining and Norsemont 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 Mako Mining and Norsemont Mining 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 Norsemont Mining, you can compare the effects of market volatilities on Mako Mining and Norsemont 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 Mako Mining with a short position of Norsemont Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and Norsemont Mining.
Diversification Opportunities for Mako Mining and Norsemont Mining
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mako and Norsemont is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Norsemont Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norsemont Mining 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 Norsemont Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norsemont Mining has no effect on the direction of Mako Mining i.e., Mako Mining and Norsemont Mining go up and down completely randomly.
Pair Corralation between Mako Mining and Norsemont Mining
Assuming the 90 days horizon Mako Mining Corp is expected to generate 0.3 times more return on investment than Norsemont Mining. However, Mako Mining Corp is 3.34 times less risky than Norsemont Mining. It trades about -0.13 of its potential returns per unit of risk. Norsemont Mining is currently generating about -0.04 per unit of risk. If you would invest 225.00 in Mako Mining Corp on August 29, 2024 and sell it today you would lose (12.00) from holding Mako Mining Corp or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mako Mining Corp vs. Norsemont Mining
Performance |
| Timeline |
| Mako Mining Corp |
| Norsemont Mining |
Mako Mining and Norsemont Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mako Mining and Norsemont Mining
The main advantage of trading using opposite Mako Mining and Norsemont Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, Norsemont 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 Norsemont Mining will offset losses from the drop in Norsemont Mining's long position.| Mako Mining vs. Aurion Resources | Mako Mining vs. Liberty Gold Corp | Mako Mining vs. Orezone Gold Corp | Mako Mining vs. Fortuna Silver Mines |
| Norsemont Mining vs. Aurion Resources | Norsemont Mining vs. Liberty Gold Corp | Norsemont Mining vs. Orezone Gold Corp | Norsemont Mining vs. Fortuna Silver Mines |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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