Correlation Between Excelsior Mining and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Excelsior Mining and Canadian Utilities 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 Excelsior Mining and Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelsior Mining Corp and Canadian Utilities Ltd, you can compare the effects of market volatilities on Excelsior Mining and Canadian Utilities 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 Excelsior Mining with a short position of Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Mining and Canadian Utilities.
Diversification Opportunities for Excelsior Mining and Canadian Utilities
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Excelsior and Canadian is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Mining Corp and Canadian Utilities Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities and Excelsior Mining 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 Excelsior Mining Corp are associated (or correlated) with Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Excelsior Mining i.e., Excelsior Mining and Canadian Utilities go up and down completely randomly.
Pair Corralation between Excelsior Mining and Canadian Utilities
Assuming the 90 days trading horizon Excelsior Mining Corp is expected to generate 12.5 times more return on investment than Canadian Utilities. However, Excelsior Mining is 12.5 times more volatile than Canadian Utilities Ltd. It trades about 0.07 of its potential returns per unit of risk. Canadian Utilities Ltd is currently generating about -0.06 per unit of risk. If you would invest 15.00 in Excelsior Mining Corp on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Excelsior Mining Corp or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excelsior Mining Corp vs. Canadian Utilities Ltd
Performance |
| Timeline |
| Excelsior Mining Corp |
| Canadian Utilities |
Excelsior Mining and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelsior Mining and Canadian Utilities
The main advantage of trading using opposite Excelsior Mining and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Mining position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| Excelsior Mining vs. RTG Mining | Excelsior Mining vs. Nubian Resources | Excelsior Mining vs. Fremont Gold | Excelsior Mining vs. Royal Road Minerals |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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