Correlation Between Mako Mining and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Mako Mining and Summit Materials 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 Summit Materials 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 Summit Materials, you can compare the effects of market volatilities on Mako Mining and Summit Materials 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 Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and Summit Materials.
Diversification Opportunities for Mako Mining and Summit Materials
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mako and Summit is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of Mako Mining i.e., Mako Mining and Summit Materials go up and down completely randomly.
Pair Corralation between Mako Mining and Summit Materials
Assuming the 90 days horizon Mako Mining Corp is expected to generate 7.49 times more return on investment than Summit Materials. However, Mako Mining is 7.49 times more volatile than Summit Materials. It trades about 0.15 of its potential returns per unit of risk. Summit Materials is currently generating about 0.27 per unit of risk. If you would invest 239.00 in Mako Mining Corp on November 4, 2024 and sell it today you would earn a total of 24.00 from holding Mako Mining Corp or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mako Mining Corp vs. Summit Materials
Performance |
| Timeline |
| Mako Mining Corp |
| Summit Materials |
Mako Mining and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mako Mining and Summit Materials
The main advantage of trading using opposite Mako Mining and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' 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 |
| Summit Materials vs. Martin Marietta Materials | Summit Materials vs. Vulcan Materials | Summit Materials vs. United States Lime | Summit Materials vs. James Hardie Industries |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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