Correlation Between Mako Mining and Laurentian Bank
Can any of the company-specific risk be diversified away by investing in both Mako Mining and Laurentian Bank 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 Laurentian Bank 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 Laurentian Bank, you can compare the effects of market volatilities on Mako Mining and Laurentian Bank 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 Laurentian Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and Laurentian Bank.
Diversification Opportunities for Mako Mining and Laurentian Bank
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mako and Laurentian is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Laurentian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurentian Bank 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 Laurentian Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laurentian Bank has no effect on the direction of Mako Mining i.e., Mako Mining and Laurentian Bank go up and down completely randomly.
Pair Corralation between Mako Mining and Laurentian Bank
Assuming the 90 days horizon Mako Mining is expected to generate 7.73 times less return on investment than Laurentian Bank. In addition to that, Mako Mining is 1.76 times more volatile than Laurentian Bank. It trades about 0.02 of its total potential returns per unit of risk. Laurentian Bank is currently generating about 0.21 per unit of volatility. If you would invest 2,580 in Laurentian Bank on September 12, 2024 and sell it today you would earn a total of 456.00 from holding Laurentian Bank or generate 17.67% 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. Laurentian Bank
Performance |
| Timeline |
| Mako Mining Corp |
| Laurentian Bank |
Mako Mining and Laurentian Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mako Mining and Laurentian Bank
The main advantage of trading using opposite Mako Mining and Laurentian Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, Laurentian Bank 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 Laurentian Bank will offset losses from the drop in Laurentian Bank's long position.| Mako Mining vs. Arizona Sonoran Copper | Mako Mining vs. Marimaca Copper Corp | Mako Mining vs. World Copper | Mako Mining vs. QC Copper and |
| Laurentian Bank vs. Sylogist | Laurentian Bank vs. Sangoma Technologies Corp | Laurentian Bank vs. Firan Technology Group | Laurentian Bank vs. iShares Canadian HYBrid |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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