Correlation Between Exploits Discovery and Mako Mining

Can any of the company-specific risk be diversified away by investing in both Exploits Discovery and Mako 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 Exploits Discovery and Mako Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exploits Discovery Corp and Mako Mining Corp, you can compare the effects of market volatilities on Exploits Discovery and Mako 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 Exploits Discovery with a short position of Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exploits Discovery and Mako Mining.

Diversification Opportunities for Exploits Discovery and Mako Mining

0.69

Correlation Coefficient

Exploits Discovery  Mako Mining

Poor diversification

The 3 months correlation between Exploits and Mako is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Exploits Discovery Corp and Mako Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mako Mining Corp and Exploits Discovery 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 Exploits Discovery Corp are associated (or correlated) with Mako Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mako Mining Corp has no effect on the direction of Exploits Discovery i.e., Exploits Discovery and Mako Mining go up and down completely randomly.

Pair Corralation between Exploits Discovery and Mako Mining

Assuming the 90 days horizon Exploits Discovery Corp is expected to generate 4.13 times more return on investment than Mako Mining. However, Exploits Discovery is 4.13 times more volatile than Mako Mining Corp. It trades about 0.0 of its potential returns per unit of risk. Mako Mining Corp is currently generating about -0.05 per unit of risk. If you would invest  3.60  in Exploits Discovery Corp on September 14, 2024 and sell it today you would lose (0.20) from holding Exploits Discovery Corp or give up 5.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Exploits Discovery Corp  vs.  Mako Mining Corp

Exploits Discovery Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exploits Discovery Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

Pair Trading with Exploits Discovery and Mako Mining

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

The idea behind Exploits Discovery Corp and Mako Mining Corp 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 Stocks Directory module to find actively traded stocks across global markets.