Correlation Between Gen III and Exro Technologies
Can any of the company-specific risk be diversified away by investing in both Gen III and Exro Technologies 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 Gen III and Exro Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gen III Oil and Exro Technologies, you can compare the effects of market volatilities on Gen III and Exro Technologies 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 Gen III with a short position of Exro Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gen III and Exro Technologies.
Diversification Opportunities for Gen III and Exro Technologies
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gen and Exro is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gen III Oil and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies and Gen III 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 Gen III Oil are associated (or correlated) with Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Gen III i.e., Gen III and Exro Technologies go up and down completely randomly.
Pair Corralation between Gen III and Exro Technologies
Assuming the 90 days trading horizon Gen III is expected to generate 1.1 times less return on investment than Exro Technologies. But when comparing it to its historical volatility, Gen III Oil is 1.36 times less risky than Exro Technologies. It trades about 0.21 of its potential returns per unit of risk. Exro Technologies is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Exro Technologies on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Exro Technologies or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gen III Oil vs. Exro Technologies
Performance |
| Timeline |
| Gen III Oil |
| Exro Technologies |
Gen III and Exro Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gen III and Exro Technologies
The main advantage of trading using opposite Gen III and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gen III position performs unexpectedly, Exro Technologies 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 Exro Technologies will offset losses from the drop in Exro Technologies' long position.| Gen III vs. Tsodilo Resources Limited | Gen III vs. Wildsky Resources | Gen III vs. Chatham Rock Phosphate | Gen III vs. Golden Pursuit Resources |
| Exro Technologies vs. Nano One Materials | Exro Technologies vs. Greenlane Renewables | Exro Technologies vs. PyroGenesis Canada | Exro Technologies vs. Vicinity Motor 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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