Correlation Between Mako Mining and New Found
Can any of the company-specific risk be diversified away by investing in both Mako Mining and New Found 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 New Found 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 New Found Gold, you can compare the effects of market volatilities on Mako Mining and New Found 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 New Found. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and New Found.
Diversification Opportunities for Mako Mining and New Found
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mako and New is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and New Found Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Found Gold 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 New Found. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Found Gold has no effect on the direction of Mako Mining i.e., Mako Mining and New Found go up and down completely randomly.
Pair Corralation between Mako Mining and New Found
Assuming the 90 days horizon Mako Mining Corp is expected to generate 0.66 times more return on investment than New Found. However, Mako Mining Corp is 1.52 times less risky than New Found. It trades about -0.03 of its potential returns per unit of risk. New Found Gold is currently generating about -0.11 per unit of risk. If you would invest 347.00 in Mako Mining Corp on September 3, 2024 and sell it today you would lose (43.00) from holding Mako Mining Corp or give up 12.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mako Mining Corp vs. New Found Gold
Performance |
| Timeline |
| Mako Mining Corp |
| New Found Gold |
Mako Mining and New Found Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mako Mining and New Found
The main advantage of trading using opposite Mako Mining and New Found positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, New Found 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 New Found will offset losses from the drop in New Found's long position.| Mako Mining vs. Thor Explorations | Mako Mining vs. K2 Gold | Mako Mining vs. Loncor Resources | Mako Mining vs. Sarama Resource |
| New Found vs. SalesforceCom CDR | New Found vs. Metalero Mining Corp | New Found vs. Mako Mining Corp | New Found vs. Capstone Mining 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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