Correlation Between ExGen Resources and Desert Gold
Can any of the company-specific risk be diversified away by investing in both ExGen Resources and Desert Gold 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 Desert Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExGen Resources and Desert Gold Ventures, you can compare the effects of market volatilities on ExGen Resources and Desert Gold 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 Desert Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExGen Resources and Desert Gold.
Diversification Opportunities for ExGen Resources and Desert Gold
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ExGen and Desert is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ExGen Resources and Desert Gold Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desert Gold Ventures 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 Desert Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desert Gold Ventures has no effect on the direction of ExGen Resources i.e., ExGen Resources and Desert Gold go up and down completely randomly.
Pair Corralation between ExGen Resources and Desert Gold
Assuming the 90 days horizon ExGen Resources is expected to generate 1.12 times more return on investment than Desert Gold. However, ExGen Resources is 1.12 times more volatile than Desert Gold Ventures. It trades about 0.05 of its potential returns per unit of risk. Desert Gold Ventures is currently generating about 0.05 per unit of risk. If you would invest 9.00 in ExGen Resources on November 27, 2024 and sell it today you would lose (2.00) from holding ExGen Resources or give up 22.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ExGen Resources vs. Desert Gold Ventures
Performance |
| Timeline |
| ExGen Resources |
| Desert Gold Ventures |
ExGen Resources and Desert Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ExGen Resources and Desert Gold
The main advantage of trading using opposite ExGen Resources and Desert Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExGen Resources position performs unexpectedly, Desert Gold 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 Desert Gold will offset losses from the drop in Desert Gold's long position.| ExGen Resources vs. Flow Beverage Corp | ExGen Resources vs. Renoworks Software | ExGen Resources vs. Farstarcap Investment Corp | ExGen Resources vs. Applied Materials, |
| Desert Gold vs. ExGen Resources | Desert Gold vs. Cariboo Rose Resources | Desert Gold vs. Fidelity Minerals Corp | Desert Gold vs. Goldbank Mining 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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