Correlation Between Exco Technologies and Precious Metals
Can any of the company-specific risk be diversified away by investing in both Exco Technologies and Precious Metals 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 Precious Metals 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 Precious Metals And, you can compare the effects of market volatilities on Exco Technologies and Precious Metals 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 Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exco Technologies and Precious Metals.
Diversification Opportunities for Exco Technologies and Precious Metals
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Exco and Precious is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Exco Technologies Limited and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Exco Technologies i.e., Exco Technologies and Precious Metals go up and down completely randomly.
Pair Corralation between Exco Technologies and Precious Metals
Assuming the 90 days trading horizon Exco Technologies Limited is expected to under-perform the Precious Metals. But the stock apears to be less risky and, when comparing its historical volatility, Exco Technologies Limited is 1.5 times less risky than Precious Metals. The stock trades about -0.39 of its potential returns per unit of risk. The Precious Metals And is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Precious Metals And on September 22, 2024 and sell it today you would lose (17.00) from holding Precious Metals And or give up 8.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exco Technologies Limited vs. Precious Metals And
Performance |
| Timeline |
| Exco Technologies |
| Precious Metals And |
Exco Technologies and Precious Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exco Technologies and Precious Metals
The main advantage of trading using opposite Exco Technologies and Precious Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exco Technologies position performs unexpectedly, Precious Metals 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 Precious Metals will offset losses from the drop in Precious Metals' long position.| Exco Technologies vs. Transcontinental | Exco Technologies vs. Methanex | Exco Technologies vs. Stella Jones | Exco Technologies vs. High Liner Foods |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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