Correlation Between Arbor Metals and ExGen Resources
Can any of the company-specific risk be diversified away by investing in both Arbor Metals and ExGen Resources 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 Arbor Metals and ExGen Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Metals Corp and ExGen Resources, you can compare the effects of market volatilities on Arbor Metals and ExGen Resources 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 Arbor Metals with a short position of ExGen Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Metals and ExGen Resources.
Diversification Opportunities for Arbor Metals and ExGen Resources
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Arbor and ExGen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Metals Corp and ExGen Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExGen Resources and Arbor Metals 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 Arbor Metals Corp are associated (or correlated) with ExGen Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExGen Resources has no effect on the direction of Arbor Metals i.e., Arbor Metals and ExGen Resources go up and down completely randomly.
Pair Corralation between Arbor Metals and ExGen Resources
Assuming the 90 days horizon Arbor Metals Corp is expected to under-perform the ExGen Resources. But the stock apears to be less risky and, when comparing its historical volatility, Arbor Metals Corp is 4.02 times less risky than ExGen Resources. The stock trades about -0.46 of its potential returns per unit of risk. The ExGen Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8.00 in ExGen Resources on September 12, 2024 and sell it today you would earn a total of 0.00 from holding ExGen Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Metals Corp vs. ExGen Resources
Performance |
| Timeline |
| Arbor Metals Corp |
| ExGen Resources |
Arbor Metals and ExGen Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Metals and ExGen Resources
The main advantage of trading using opposite Arbor Metals and ExGen Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Metals position performs unexpectedly, ExGen Resources 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 ExGen Resources will offset losses from the drop in ExGen Resources' long position.| Arbor Metals vs. Kiplin Metals | Arbor Metals vs. Pure Energy Minerals | Arbor Metals vs. Noram Lithium Corp | Arbor Metals vs. Minnova Corp |
| ExGen Resources vs. Arbor Metals Corp | ExGen Resources vs. Ramp Metals | ExGen Resources vs. High Liner Foods | ExGen Resources vs. Electra Battery Materials |
Check out your portfolio center.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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