Correlation Between Mako Mining and Arizona Metals
Can any of the company-specific risk be diversified away by investing in both Mako Mining and Arizona Metals 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 Arizona Metals 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 Arizona Metals Corp, you can compare the effects of market volatilities on Mako Mining and Arizona Metals 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 Arizona Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and Arizona Metals.
Diversification Opportunities for Mako Mining and Arizona Metals
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mako and Arizona is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Arizona Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Metals Corp 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 Arizona Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Metals Corp has no effect on the direction of Mako Mining i.e., Mako Mining and Arizona Metals go up and down completely randomly.
Pair Corralation between Mako Mining and Arizona Metals
Assuming the 90 days horizon Mako Mining Corp is expected to under-perform the Arizona Metals. But the stock apears to be less risky and, when comparing its historical volatility, Mako Mining Corp is 2.46 times less risky than Arizona Metals. The stock trades about -0.07 of its potential returns per unit of risk. The Arizona Metals Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 145.00 in Arizona Metals Corp on August 30, 2024 and sell it today you would earn a total of 36.00 from holding Arizona Metals Corp or generate 24.83% 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. Arizona Metals Corp
Performance |
| Timeline |
| Mako Mining Corp |
| Arizona Metals Corp |
Mako Mining and Arizona Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mako Mining and Arizona Metals
The main advantage of trading using opposite Mako Mining and Arizona Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, Arizona Metals 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 Arizona Metals will offset losses from the drop in Arizona Metals' long position.| Mako Mining vs. Thor Explorations | Mako Mining vs. K2 Gold | Mako Mining vs. Loncor Resources | Mako Mining vs. Sarama Resource |
| Arizona Metals vs. i 80 Gold Corp | Arizona Metals vs. Ressources Minieres Radisson | Arizona Metals vs. Amerigo 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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