Correlation Between Mako Mining and KDA

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

Diversification Opportunities for Mako Mining and KDA

-0.27

Correlation Coefficient

Mako Mining  KDA

Very good diversification

The 3 months correlation between Mako and KDA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mako Mining Corp and KDA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KDA Group 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 KDA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KDA Group has no effect on the direction of Mako Mining i.e., Mako Mining and KDA go up and down completely randomly.

Pair Corralation between Mako Mining and KDA

Assuming the 90 days horizon Mako Mining Corp is expected to under-perform the KDA. But the stock apears to be less risky and, when comparing its historical volatility, Mako Mining Corp is 2.56 times less risky than KDA. The stock trades about -0.05 of its potential returns per unit of risk. The KDA Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  28.00  in KDA Group on September 27, 2024 and sell it today you would earn a total of  0.00  from holding KDA Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mako Mining Corp  vs.  KDA Group

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. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

KDA Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KDA Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, KDA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mako Mining and KDA

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

The idea behind Mako Mining Corp and KDA Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.