Correlation Between Excellon Resources and Polaris Infrastructure
Can any of the company-specific risk be diversified away by investing in both Excellon Resources and Polaris Infrastructure 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 Polaris Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excellon Resources and Polaris Infrastructure, you can compare the effects of market volatilities on Excellon Resources and Polaris Infrastructure 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 Polaris Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excellon Resources and Polaris Infrastructure.
Diversification Opportunities for Excellon Resources and Polaris Infrastructure
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Excellon and Polaris is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Excellon Resources and Polaris Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Infrastructure 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 Polaris Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Infrastructure has no effect on the direction of Excellon Resources i.e., Excellon Resources and Polaris Infrastructure go up and down completely randomly.
Pair Corralation between Excellon Resources and Polaris Infrastructure
Assuming the 90 days trading horizon Excellon Resources is expected to generate 4.13 times more return on investment than Polaris Infrastructure. However, Excellon Resources is 4.13 times more volatile than Polaris Infrastructure. It trades about -0.06 of its potential returns per unit of risk. Polaris Infrastructure is currently generating about -0.27 per unit of risk. If you would invest 9.00 in Excellon Resources on November 4, 2024 and sell it today you would lose (0.50) from holding Excellon Resources or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excellon Resources vs. Polaris Infrastructure
Performance |
| Timeline |
| Excellon Resources |
| Polaris Infrastructure |
Excellon Resources and Polaris Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excellon Resources and Polaris Infrastructure
The main advantage of trading using opposite Excellon Resources and Polaris Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excellon Resources position performs unexpectedly, Polaris Infrastructure 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 Polaris Infrastructure will offset losses from the drop in Polaris Infrastructure'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 |
| Polaris Infrastructure vs. Innergex Renewable Energy | Polaris Infrastructure vs. Boralex | Polaris Infrastructure vs. Northland Power |
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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