Correlation Between Exco Technologies and Brompton Split
Can any of the company-specific risk be diversified away by investing in both Exco Technologies and Brompton Split 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 Brompton Split 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 Brompton Split Banc, you can compare the effects of market volatilities on Exco Technologies and Brompton Split 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 Brompton Split. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exco Technologies and Brompton Split.
Diversification Opportunities for Exco Technologies and Brompton Split
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exco and Brompton is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Exco Technologies Limited and Brompton Split Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Split Banc 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 Brompton Split. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Split Banc has no effect on the direction of Exco Technologies i.e., Exco Technologies and Brompton Split go up and down completely randomly.
Pair Corralation between Exco Technologies and Brompton Split
Assuming the 90 days trading horizon Exco Technologies Limited is expected to under-perform the Brompton Split. In addition to that, Exco Technologies is 1.97 times more volatile than Brompton Split Banc. It trades about -0.38 of its total potential returns per unit of risk. Brompton Split Banc is currently generating about -0.17 per unit of volatility. If you would invest 1,072 in Brompton Split Banc on September 15, 2024 and sell it today you would lose (22.00) from holding Brompton Split Banc or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exco Technologies Limited vs. Brompton Split Banc
Performance |
| Timeline |
| Exco Technologies |
| Brompton Split Banc |
Exco Technologies and Brompton Split Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exco Technologies and Brompton Split
The main advantage of trading using opposite Exco Technologies and Brompton Split positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exco Technologies position performs unexpectedly, Brompton Split 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 Brompton Split will offset losses from the drop in Brompton Split's long position.| Exco Technologies vs. Transcontinental | Exco Technologies vs. Methanex | Exco Technologies vs. Stella Jones | Exco Technologies vs. High Liner Foods |
| Brompton Split vs. Air Canada | Brompton Split vs. Exco Technologies Limited | Brompton Split vs. Medical Facilities | Brompton Split vs. Pioneering Technology 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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