Correlation Between ExGen Resources and Arbor Metals
Can any of the company-specific risk be diversified away by investing in both ExGen Resources and Arbor Metals 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 ExGen Resources and Arbor Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExGen Resources and Arbor Metals Corp, you can compare the effects of market volatilities on ExGen Resources and Arbor Metals 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 ExGen Resources with a short position of Arbor Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExGen Resources and Arbor Metals.
Diversification Opportunities for ExGen Resources and Arbor Metals
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ExGen and Arbor is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ExGen Resources and Arbor Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Metals Corp and ExGen Resources 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 ExGen Resources are associated (or correlated) with Arbor Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Metals Corp has no effect on the direction of ExGen Resources i.e., ExGen Resources and Arbor Metals go up and down completely randomly.
Pair Corralation between ExGen Resources and Arbor Metals
Assuming the 90 days horizon ExGen Resources is expected to generate 4.02 times more return on investment than Arbor Metals. However, ExGen Resources is 4.02 times more volatile than Arbor Metals Corp. It trades about 0.05 of its potential returns per unit of risk. Arbor Metals Corp is currently generating about -0.46 per unit of risk. 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 |
ExGen Resources vs. Arbor Metals Corp
Performance |
| Timeline |
| ExGen Resources |
| Arbor Metals Corp |
ExGen Resources and Arbor Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ExGen Resources and Arbor Metals
The main advantage of trading using opposite ExGen Resources and Arbor Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExGen Resources position performs unexpectedly, Arbor Metals 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 Arbor Metals will offset losses from the drop in Arbor Metals' long position.| ExGen Resources vs. Arbor Metals Corp | ExGen Resources vs. Ramp Metals | ExGen Resources vs. High Liner Foods | ExGen Resources vs. Electra Battery Materials |
| Arbor Metals vs. Kiplin Metals | Arbor Metals vs. Pure Energy Minerals | Arbor Metals vs. Noram Lithium Corp | Arbor Metals vs. Minnova Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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