Correlation Between Mako Mining and TomaGold

Can any of the company-specific risk be diversified away by investing in both Mako Mining and TomaGold 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 TomaGold 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 TomaGold, you can compare the effects of market volatilities on Mako Mining and TomaGold 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 TomaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mako Mining and TomaGold.

Diversification Opportunities for Mako Mining and TomaGold

0.14

Correlation Coefficient

Mako Mining  TomaGold

Average diversification

The 3 months correlation between Mako and TomaGold is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and TomaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TomaGold 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 TomaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TomaGold has no effect on the direction of Mako Mining i.e., Mako Mining and TomaGold go up and down completely randomly.

Pair Corralation between Mako Mining and TomaGold

Assuming the 90 days horizon Mako Mining Corp is expected to under-perform the TomaGold. But the otc stock apears to be less risky and, when comparing its historical volatility, Mako Mining Corp is 6.5 times less risky than TomaGold. The otc stock trades about -0.07 of its potential returns per unit of risk. The TomaGold is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1.48  in TomaGold on September 5, 2024 and sell it today you would lose (0.41) from holding TomaGold or give up 27.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Mako Mining Corp  vs.  TomaGold

Mako Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mako Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Mako Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

TomaGold

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TomaGold are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, TomaGold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mako Mining and TomaGold

The main advantage of trading using opposite Mako Mining and TomaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mako Mining position performs unexpectedly, TomaGold 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 TomaGold will offset losses from the drop in TomaGold's long position.

The idea behind Mako Mining Corp and TomaGold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .