Correlation Between Excelsior Mining and American Hotel
Can any of the company-specific risk be diversified away by investing in both Excelsior Mining and American Hotel 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 American Hotel 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 American Hotel Income, you can compare the effects of market volatilities on Excelsior Mining and American Hotel 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 American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Mining and American Hotel.
Diversification Opportunities for Excelsior Mining and American Hotel
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Excelsior and American is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Mining Corp and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income 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 American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Excelsior Mining i.e., Excelsior Mining and American Hotel go up and down completely randomly.
Pair Corralation between Excelsior Mining and American Hotel
Assuming the 90 days trading horizon Excelsior Mining Corp is expected to generate 0.66 times more return on investment than American Hotel. However, Excelsior Mining Corp is 1.52 times less risky than American Hotel. It trades about 0.02 of its potential returns per unit of risk. American Hotel Income is currently generating about -0.13 per unit of risk. If you would invest 20.00 in Excelsior Mining Corp on November 1, 2024 and sell it today you would earn a total of 0.00 from holding Excelsior Mining Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 57.14% |
| Values | Daily Returns |
Excelsior Mining Corp vs. American Hotel Income
Performance |
| Timeline |
| Excelsior Mining Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| American Hotel Income |
Excelsior Mining and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelsior Mining and American Hotel
The main advantage of trading using opposite Excelsior Mining and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Mining position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| Excelsior Mining vs. RTG Mining | Excelsior Mining vs. Nubian Resources | Excelsior Mining vs. Royal Road Minerals |
| American Hotel vs. T2 Metals Corp | American Hotel vs. Nicola Mining | American Hotel vs. Calibre Mining Corp | American Hotel vs. Metalero Mining 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |