Correlation Between ExGen Resources and US Financial
Can any of the company-specific risk be diversified away by investing in both ExGen Resources and US Financial 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 US Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExGen Resources and US Financial 15, you can compare the effects of market volatilities on ExGen Resources and US Financial 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 US Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExGen Resources and US Financial.
Diversification Opportunities for ExGen Resources and US Financial
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ExGen and FTU-PB is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding ExGen Resources and US Financial 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Financial 15 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 US Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Financial 15 has no effect on the direction of ExGen Resources i.e., ExGen Resources and US Financial go up and down completely randomly.
Pair Corralation between ExGen Resources and US Financial
Assuming the 90 days horizon ExGen Resources is expected to generate 8.83 times more return on investment than US Financial. However, ExGen Resources is 8.83 times more volatile than US Financial 15. It trades about 0.05 of its potential returns per unit of risk. US Financial 15 is currently generating about 0.08 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ExGen Resources vs. US Financial 15
Performance |
| Timeline |
| ExGen Resources |
| US Financial 15 |
ExGen Resources and US Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ExGen Resources and US Financial
The main advantage of trading using opposite ExGen Resources and US Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExGen Resources position performs unexpectedly, US Financial 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 US Financial will offset losses from the drop in US Financial's 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 |
| US Financial vs. Brookfield Infrastructure Partners | US Financial vs. Brookfield Infrastructure Partners | US Financial vs. iShares Canadian HYBrid | US Financial vs. Solar Alliance Energy |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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