Correlation Between Arbor Metals and Xtract One
Can any of the company-specific risk be diversified away by investing in both Arbor Metals and Xtract One 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 Xtract One 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 Xtract One Technologies, you can compare the effects of market volatilities on Arbor Metals and Xtract One 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 Xtract One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Metals and Xtract One.
Diversification Opportunities for Arbor Metals and Xtract One
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arbor and Xtract is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Metals Corp and Xtract One Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtract One Technologies 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 Xtract One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtract One Technologies has no effect on the direction of Arbor Metals i.e., Arbor Metals and Xtract One go up and down completely randomly.
Pair Corralation between Arbor Metals and Xtract One
Assuming the 90 days horizon Arbor Metals Corp is expected to under-perform the Xtract One. In addition to that, Arbor Metals is 1.09 times more volatile than Xtract One Technologies. It trades about -0.15 of its total potential returns per unit of risk. Xtract One Technologies is currently generating about -0.1 per unit of volatility. If you would invest 74.00 in Xtract One Technologies on August 26, 2024 and sell it today you would lose (5.00) from holding Xtract One Technologies or give up 6.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Metals Corp vs. Xtract One Technologies
Performance |
| Timeline |
| Arbor Metals Corp |
| Xtract One Technologies |
Arbor Metals and Xtract One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Metals and Xtract One
The main advantage of trading using opposite Arbor Metals and Xtract One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Metals position performs unexpectedly, Xtract One 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 Xtract One will offset losses from the drop in Xtract One's long position.| Arbor Metals vs. First Majestic Silver | Arbor Metals vs. Ivanhoe Energy | Arbor Metals vs. Orezone Gold Corp | Arbor Metals vs. Faraday Copper Corp |
| Xtract One vs. Slate Grocery REIT | Xtract One vs. Roots Corp | Xtract One vs. Aimia Inc | Xtract One vs. Tucows Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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