Correlation Between Excellon Resources and Converge Technology
Can any of the company-specific risk be diversified away by investing in both Excellon Resources and Converge Technology 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 Excellon Resources and Converge Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excellon Resources and Converge Technology Solutions, you can compare the effects of market volatilities on Excellon Resources and Converge Technology 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 Excellon Resources with a short position of Converge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excellon Resources and Converge Technology.
Diversification Opportunities for Excellon Resources and Converge Technology
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Excellon and Converge is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Excellon Resources and Converge Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Technology and Excellon 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 Excellon Resources are associated (or correlated) with Converge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Technology has no effect on the direction of Excellon Resources i.e., Excellon Resources and Converge Technology go up and down completely randomly.
Pair Corralation between Excellon Resources and Converge Technology
Assuming the 90 days trading horizon Excellon Resources is expected to generate 2.21 times more return on investment than Converge Technology. However, Excellon Resources is 2.21 times more volatile than Converge Technology Solutions. It trades about 0.03 of its potential returns per unit of risk. Converge Technology Solutions is currently generating about 0.01 per unit of risk. If you would invest 9.00 in Excellon Resources on November 9, 2024 and sell it today you would earn a total of 0.00 from holding Excellon 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 |
Excellon Resources vs. Converge Technology Solutions
Performance |
| Timeline |
| Excellon Resources |
| Converge Technology |
Excellon Resources and Converge Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excellon Resources and Converge Technology
The main advantage of trading using opposite Excellon Resources and Converge Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excellon Resources position performs unexpectedly, Converge Technology 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 Converge Technology will offset losses from the drop in Converge Technology's long position.| Excellon Resources vs. Minco Silver | Excellon Resources vs. Americas Silver Corp | Excellon Resources vs. IMPACT Silver Corp | Excellon Resources vs. Dolly Varden Silver |
| Converge Technology vs. Dye Durham | Converge Technology vs. Docebo Inc | Converge Technology vs. Topicus | Converge Technology vs. goeasy |
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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