Correlation Between Exxon and Canagold Resources
Can any of the company-specific risk be diversified away by investing in both Exxon and Canagold Resources 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 Exxon and Canagold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXXON MOBIL CDR and Canagold Resources, you can compare the effects of market volatilities on Exxon and Canagold Resources 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 Exxon with a short position of Canagold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Canagold Resources.
Diversification Opportunities for Exxon and Canagold Resources
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Canagold is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding EXXON MOBIL CDR and Canagold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canagold Resources and Exxon 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 EXXON MOBIL CDR are associated (or correlated) with Canagold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canagold Resources has no effect on the direction of Exxon i.e., Exxon and Canagold Resources go up and down completely randomly.
Pair Corralation between Exxon and Canagold Resources
Assuming the 90 days trading horizon Exxon is expected to generate 4.14 times less return on investment than Canagold Resources. But when comparing it to its historical volatility, EXXON MOBIL CDR is 2.2 times less risky than Canagold Resources. It trades about 0.04 of its potential returns per unit of risk. Canagold Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Canagold Resources on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Canagold Resources or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EXXON MOBIL CDR vs. Canagold Resources
Performance |
| Timeline |
| EXXON MOBIL CDR |
| Canagold Resources |
Exxon and Canagold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Canagold Resources
The main advantage of trading using opposite Exxon and Canagold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Canagold Resources 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 Canagold Resources will offset losses from the drop in Canagold Resources' long position.| Exxon vs. Western Investment | Exxon vs. Upstart Investments | Exxon vs. Atrium Mortgage Investment | Exxon vs. 2028 Investment Grade |
| Canagold Resources vs. Starcore International Mines | Canagold Resources vs. Chesapeake Gold Corp | Canagold Resources vs. Emergent Metals Corp | Canagold Resources vs. Galantas Gold 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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