Correlation Between Exco Technologies and Alliance Mining
Can any of the company-specific risk be diversified away by investing in both Exco Technologies and Alliance Mining 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 Exco Technologies and Alliance Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exco Technologies Limited and Alliance Mining Corp, you can compare the effects of market volatilities on Exco Technologies and Alliance Mining 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 Exco Technologies with a short position of Alliance Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exco Technologies and Alliance Mining.
Diversification Opportunities for Exco Technologies and Alliance Mining
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exco and Alliance is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Exco Technologies Limited and Alliance Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Mining Corp and Exco Technologies 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 Exco Technologies Limited are associated (or correlated) with Alliance Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Mining Corp has no effect on the direction of Exco Technologies i.e., Exco Technologies and Alliance Mining go up and down completely randomly.
Pair Corralation between Exco Technologies and Alliance Mining
Assuming the 90 days trading horizon Exco Technologies Limited is expected to under-perform the Alliance Mining. But the stock apears to be less risky and, when comparing its historical volatility, Exco Technologies Limited is 6.46 times less risky than Alliance Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Alliance Mining Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Alliance Mining Corp on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Alliance Mining Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exco Technologies Limited vs. Alliance Mining Corp
Performance |
| Timeline |
| Exco Technologies |
| Alliance Mining Corp |
Exco Technologies and Alliance Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exco Technologies and Alliance Mining
The main advantage of trading using opposite Exco Technologies and Alliance Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exco Technologies position performs unexpectedly, Alliance Mining 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 Alliance Mining will offset losses from the drop in Alliance Mining's long position.| Exco Technologies vs. Transcontinental | Exco Technologies vs. Methanex | Exco Technologies vs. Stella Jones | Exco Technologies vs. High Liner Foods |
| Alliance Mining vs. Highwood Asset Management | Alliance Mining vs. Goodfood Market Corp | Alliance Mining vs. Canadian Utilities Limited | Alliance Mining vs. Atrium Mortgage Investment |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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