Correlation Between Revival Gold and Makara Mining

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

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

Diversification Opportunities for Revival Gold and Makara Mining

0.46

Correlation Coefficient

Revival Gold  Makara Mining

Very weak diversification

The 3 months correlation between Revival and Makara is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Revival Gold and Makara Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makara Mining Corp and Revival Gold 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 Revival Gold are associated (or correlated) with Makara Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makara Mining Corp has no effect on the direction of Revival Gold i.e., Revival Gold and Makara Mining go up and down completely randomly.

Pair Corralation between Revival Gold and Makara Mining

Assuming the 90 days horizon Revival Gold is expected to under-perform the Makara Mining. But the otc stock apears to be less risky and, when comparing its historical volatility, Revival Gold is 7.53 times less risky than Makara Mining. The otc stock trades about -0.02 of its potential returns per unit of risk. The Makara Mining Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  6.30  in Makara Mining Corp on September 12, 2024 and sell it today you would earn a total of  2.50  from holding Makara Mining Corp or generate 39.68% return on investment over 90 days.

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

Revival Gold  vs.  Makara Mining Corp

Revival Gold

Risk-Adjusted Performance

0 of 100

Very Weak

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

Makara Mining Corp

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with Revival Gold and Makara Mining

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

The idea behind Revival Gold and Makara 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.