Correlation Between XCana Petroleum and Xtra Energy
Can any of the company-specific risk be diversified away by investing in both XCana Petroleum and Xtra Energy 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 XCana Petroleum and Xtra Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XCana Petroleum and Xtra Energy Corp, you can compare the effects of market volatilities on XCana Petroleum and Xtra Energy 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 XCana Petroleum with a short position of Xtra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of XCana Petroleum and Xtra Energy.
Diversification Opportunities for XCana Petroleum and Xtra Energy
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XCana and Xtra is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding XCana Petroleum and Xtra Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtra Energy Corp and XCana Petroleum 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 XCana Petroleum are associated (or correlated) with Xtra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtra Energy Corp has no effect on the direction of XCana Petroleum i.e., XCana Petroleum and Xtra Energy go up and down completely randomly.
Pair Corralation between XCana Petroleum and Xtra Energy
Given the investment horizon of 90 days XCana Petroleum is expected to generate 4.37 times more return on investment than Xtra Energy. However, XCana Petroleum is 4.37 times more volatile than Xtra Energy Corp. It trades about 0.1 of its potential returns per unit of risk. Xtra Energy Corp is currently generating about 0.05 per unit of risk. If you would invest 22.00 in XCana Petroleum on November 5, 2024 and sell it today you would lose (5.00) from holding XCana Petroleum or give up 22.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
XCana Petroleum vs. Xtra Energy Corp
Performance |
| Timeline |
| XCana Petroleum |
| Xtra Energy Corp |
XCana Petroleum and Xtra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XCana Petroleum and Xtra Energy
The main advantage of trading using opposite XCana Petroleum and Xtra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XCana Petroleum position performs unexpectedly, Xtra Energy 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 Xtra Energy will offset losses from the drop in Xtra Energy's long position.| XCana Petroleum vs. Xtra Energy Corp | XCana Petroleum vs. A1 Group | XCana Petroleum vs. New Generation Consumer | XCana Petroleum vs. Palayan Resources |
| Xtra Energy vs. XCana Petroleum | Xtra Energy vs. New Generation Consumer | Xtra Energy vs. Arsenal Digital Holdings | Xtra Energy vs. UHF Logistics Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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