Correlation Between TMX Group and NanoXplore
Can any of the company-specific risk be diversified away by investing in both TMX Group and NanoXplore 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 TMX Group and NanoXplore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMX Group Limited and NanoXplore, you can compare the effects of market volatilities on TMX Group and NanoXplore 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 TMX Group with a short position of NanoXplore. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMX Group and NanoXplore.
Diversification Opportunities for TMX Group and NanoXplore
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TMX and NanoXplore is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding TMX Group Limited and NanoXplore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoXplore and TMX Group 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 TMX Group Limited are associated (or correlated) with NanoXplore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoXplore has no effect on the direction of TMX Group i.e., TMX Group and NanoXplore go up and down completely randomly.
Pair Corralation between TMX Group and NanoXplore
Given the investment horizon of 90 days TMX Group is expected to generate 5.06 times less return on investment than NanoXplore. But when comparing it to its historical volatility, TMX Group Limited is 2.87 times less risky than NanoXplore. It trades about 0.06 of its potential returns per unit of risk. NanoXplore is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 229.00 in NanoXplore on November 3, 2024 and sell it today you would earn a total of 22.00 from holding NanoXplore or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TMX Group Limited vs. NanoXplore
Performance |
| Timeline |
| TMX Group Limited |
| NanoXplore |
TMX Group and NanoXplore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMX Group and NanoXplore
The main advantage of trading using opposite TMX Group and NanoXplore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMX Group position performs unexpectedly, NanoXplore 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 NanoXplore will offset losses from the drop in NanoXplore's long position.| TMX Group vs. Mako Mining Corp | TMX Group vs. Metalero Mining Corp | TMX Group vs. Questor Technology | TMX Group vs. Endeavour Silver Corp |
| NanoXplore vs. Graphene Manufacturing Group | NanoXplore vs. Nano One Materials | NanoXplore vs. Coveo Solutions | NanoXplore vs. ZEN Graphene Solutions |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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