Correlation Between Gravity and Mako Mining

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

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

Diversification Opportunities for Gravity and Mako Mining

-0.25

Correlation Coefficient

Gravity  Mako Mining

Very good diversification

The 3 months correlation between Gravity and Mako is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gravity Co 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 Gravity 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 Gravity Co 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 Gravity i.e., Gravity and Mako Mining go up and down completely randomly.

Pair Corralation between Gravity and Mako Mining

Given the investment horizon of 90 days Gravity is expected to generate 17.21 times less return on investment than Mako Mining. But when comparing it to its historical volatility, Gravity Co is 1.62 times less risky than Mako Mining. It trades about 0.01 of its potential returns per unit of risk. Mako Mining Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  239.00  in Mako Mining Corp on January 3, 2025 and sell it today you would earn a total of  58.00  from holding Mako Mining Corp or generate 24.27% return on investment over 90 days.

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

Gravity Co  vs.  Mako Mining Corp

Gravity

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gravity Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Gravity is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Mako Mining Corp

Risk-Adjusted Performance

OK

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

Pair Trading with Gravity and Mako Mining

The main advantage of trading using opposite Gravity and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gravity 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 Gravity Co 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.