Correlation Between Mako Mining and Andean Precious
Can any of the company-specific risk be diversified away by investing in both Mako Mining and Andean Precious 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 Andean Precious 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 Andean Precious Metals, you can compare the effects of market volatilities on Mako Mining and Andean Precious 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 Andean Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and Andean Precious.
Diversification Opportunities for Mako Mining and Andean Precious
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mako and Andean is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Andean Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andean Precious Metals 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 Andean Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andean Precious Metals has no effect on the direction of Mako Mining i.e., Mako Mining and Andean Precious go up and down completely randomly.
Pair Corralation between Mako Mining and Andean Precious
Assuming the 90 days horizon Mako Mining is expected to generate 2.06 times less return on investment than Andean Precious. But when comparing it to its historical volatility, Mako Mining Corp is 1.24 times less risky than Andean Precious. It trades about 0.22 of its potential returns per unit of risk. Andean Precious Metals is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 117.00 in Andean Precious Metals on November 7, 2024 and sell it today you would earn a total of 41.00 from holding Andean Precious Metals or generate 35.04% 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. Andean Precious Metals
Performance |
| Timeline |
| Mako Mining Corp |
| Andean Precious Metals |
Mako Mining and Andean Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mako Mining and Andean Precious
The main advantage of trading using opposite Mako Mining and Andean Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, Andean Precious 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 Andean Precious will offset losses from the drop in Andean Precious' long position.| Mako Mining vs. Thor Explorations | Mako Mining vs. K2 Gold | Mako Mining vs. Loncor Resources | Mako Mining vs. Sarama Resource |
| Andean Precious vs. Pan American Silver | Andean Precious vs. MAG Silver Corp | Andean Precious vs. Fortuna Silver Mines | Andean Precious vs. Aya Gold Silver |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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