Correlation Between Mako Mining and Monument Mining
Can any of the company-specific risk be diversified away by investing in both Mako Mining and Monument Mining 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 Monument Mining 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 Monument Mining Limited, you can compare the effects of market volatilities on Mako Mining and Monument Mining 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 Monument Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and Monument Mining.
Diversification Opportunities for Mako Mining and Monument Mining
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mako and Monument is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining 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 Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of Mako Mining i.e., Mako Mining and Monument Mining go up and down completely randomly.
Pair Corralation between Mako Mining and Monument Mining
Assuming the 90 days horizon Mako Mining Corp is expected to under-perform the Monument Mining. But the stock apears to be less risky and, when comparing its historical volatility, Mako Mining Corp is 1.81 times less risky than Monument Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Monument Mining Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Monument Mining Limited on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Monument Mining Limited or generate 85.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mako Mining Corp vs. Monument Mining Limited
Performance |
| Timeline |
| Mako Mining Corp |
| Monument Mining |
Mako Mining and Monument Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mako Mining and Monument Mining
The main advantage of trading using opposite Mako Mining and Monument Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, Monument Mining 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 Monument Mining will offset losses from the drop in Monument Mining's long position.| Mako Mining vs. Thor Explorations | Mako Mining vs. K2 Gold | Mako Mining vs. Loncor Resources | Mako Mining vs. Sarama Resource |
| Monument Mining vs. First Majestic Silver | Monument Mining vs. Ivanhoe Energy | Monument Mining vs. Orezone Gold Corp | Monument Mining vs. Faraday Copper Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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