Correlation Between Exxaro Resources and New Hope
Can any of the company-specific risk be diversified away by investing in both Exxaro Resources and New Hope 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 Exxaro Resources and New Hope into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxaro Resources Limited and New Hope, you can compare the effects of market volatilities on Exxaro Resources and New Hope 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 Exxaro Resources with a short position of New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxaro Resources and New Hope.
Diversification Opportunities for Exxaro Resources and New Hope
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Exxaro and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exxaro Resources Limited and New Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope and Exxaro 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 Exxaro Resources Limited are associated (or correlated) with New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope has no effect on the direction of Exxaro Resources i.e., Exxaro Resources and New Hope go up and down completely randomly.
Pair Corralation between Exxaro Resources and New Hope
If you would invest (100.00) in Exxaro Resources Limited on November 27, 2024 and sell it today you would earn a total of 100.00 from holding Exxaro Resources Limited or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Exxaro Resources Limited vs. New Hope
Performance |
| Timeline |
| Exxaro Resources |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| New Hope |
Exxaro Resources and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxaro Resources and New Hope
The main advantage of trading using opposite Exxaro Resources and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxaro Resources position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.| Exxaro Resources vs. Yancoal Australia | Exxaro Resources vs. China Coal Energy | Exxaro Resources vs. Bukit Asam Tbk | Exxaro Resources vs. Indo Tambangraya Megah |
| New Hope vs. Adaro Energy Tbk | New Hope vs. Geo Energy Resources | New Hope vs. Bukit Asam Tbk | New Hope vs. Yancoal Australia |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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