Correlation Between Mako Mining and Plato Gold
Can any of the company-specific risk be diversified away by investing in both Mako Mining and Plato Gold 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 Plato Gold 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 Plato Gold Corp, you can compare the effects of market volatilities on Mako Mining and Plato Gold 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 Plato Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and Plato Gold.
Diversification Opportunities for Mako Mining and Plato Gold
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mako and Plato is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and Plato Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plato Gold Corp 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 Plato Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plato Gold Corp has no effect on the direction of Mako Mining i.e., Mako Mining and Plato Gold go up and down completely randomly.
Pair Corralation between Mako Mining and Plato Gold
Assuming the 90 days horizon Mako Mining Corp is expected to under-perform the Plato Gold. But the stock apears to be less risky and, when comparing its historical volatility, Mako Mining Corp is 5.64 times less risky than Plato Gold. The stock trades about -0.03 of its potential returns per unit of risk. The Plato Gold Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Plato Gold Corp on August 25, 2024 and sell it today you would lose (0.50) from holding Plato Gold Corp or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mako Mining Corp vs. Plato Gold Corp
Performance |
| Timeline |
| Mako Mining Corp |
| Plato Gold Corp |
Mako Mining and Plato Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mako Mining and Plato Gold
The main advantage of trading using opposite Mako Mining and Plato Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, Plato Gold 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 Plato Gold will offset losses from the drop in Plato Gold's long position.| Mako Mining vs. Plato Gold Corp | Mako Mining vs. Rochester Resources | Mako Mining vs. Forstrong Global Income | Mako Mining vs. Terreno Resources Corp |
| Plato Gold vs. Q Gold Resources | Plato Gold vs. MAS Gold Corp | Plato Gold vs. ExGen Resources | Plato Gold vs. Carlin Gold |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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