Correlation Between Excelsior Mining and Dream Industrial
Can any of the company-specific risk be diversified away by investing in both Excelsior Mining and Dream Industrial 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 Dream Industrial 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 Dream Industrial Real, you can compare the effects of market volatilities on Excelsior Mining and Dream Industrial 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 Dream Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Mining and Dream Industrial.
Diversification Opportunities for Excelsior Mining and Dream Industrial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Excelsior and Dream is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Mining Corp and Dream Industrial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Industrial Real 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 Dream Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Industrial Real has no effect on the direction of Excelsior Mining i.e., Excelsior Mining and Dream Industrial go up and down completely randomly.
Pair Corralation between Excelsior Mining and Dream Industrial
Assuming the 90 days trading horizon Excelsior Mining Corp is expected to under-perform the Dream Industrial. In addition to that, Excelsior Mining is 3.78 times more volatile than Dream Industrial Real. It trades about -0.07 of its total potential returns per unit of risk. Dream Industrial Real is currently generating about -0.1 per unit of volatility. If you would invest 1,204 in Dream Industrial Real on November 7, 2024 and sell it today you would lose (42.00) from holding Dream Industrial Real or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 40.91% |
| Values | Daily Returns |
Excelsior Mining Corp vs. Dream Industrial Real
Performance |
| Timeline |
| Excelsior Mining Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Dream Industrial Real |
Excelsior Mining and Dream Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelsior Mining and Dream Industrial
The main advantage of trading using opposite Excelsior Mining and Dream Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Mining position performs unexpectedly, Dream Industrial 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 Dream Industrial will offset losses from the drop in Dream Industrial's long position.| Excelsior Mining vs. RTG Mining | Excelsior Mining vs. Nubian Resources | Excelsior Mining vs. Royal Road Minerals |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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