Correlation Between Mako Mining and Lycos Energy
Can any of the company-specific risk be diversified away by investing in both Mako Mining and Lycos Energy 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 Lycos Energy 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 Lycos Energy, you can compare the effects of market volatilities on Mako Mining and Lycos Energy 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 Lycos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and Lycos Energy.
Diversification Opportunities for Mako Mining and Lycos Energy
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mako and Lycos is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Lycos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lycos Energy 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 Lycos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lycos Energy has no effect on the direction of Mako Mining i.e., Mako Mining and Lycos Energy go up and down completely randomly.
Pair Corralation between Mako Mining and Lycos Energy
Assuming the 90 days horizon Mako Mining Corp is expected to under-perform the Lycos Energy. But the stock apears to be less risky and, when comparing its historical volatility, Mako Mining Corp is 1.5 times less risky than Lycos Energy. The stock trades about -0.22 of its potential returns per unit of risk. The Lycos Energy is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Lycos Energy on October 1, 2024 and sell it today you would lose (21.00) from holding Lycos Energy or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mako Mining Corp vs. Lycos Energy
Performance |
| Timeline |
| Mako Mining Corp |
| Lycos Energy |
Mako Mining and Lycos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mako Mining and Lycos Energy
The main advantage of trading using opposite Mako Mining and Lycos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, Lycos Energy 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 Lycos Energy will offset losses from the drop in Lycos Energy's long position.| Mako Mining vs. Thor Explorations | Mako Mining vs. K2 Gold | Mako Mining vs. Loncor Resources | Mako Mining vs. Sarama Resource |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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