Correlation Between Xtra Energy and Coastal Capital
Can any of the company-specific risk be diversified away by investing in both Xtra Energy and Coastal Capital 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 Xtra Energy and Coastal Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtra Energy Corp and Coastal Capital Acq, you can compare the effects of market volatilities on Xtra Energy and Coastal Capital 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 Xtra Energy with a short position of Coastal Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtra Energy and Coastal Capital.
Diversification Opportunities for Xtra Energy and Coastal Capital
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xtra and Coastal is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xtra Energy Corp and Coastal Capital Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Capital Acq and Xtra Energy 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 Xtra Energy Corp are associated (or correlated) with Coastal Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Capital Acq has no effect on the direction of Xtra Energy i.e., Xtra Energy and Coastal Capital go up and down completely randomly.
Pair Corralation between Xtra Energy and Coastal Capital
Given the investment horizon of 90 days Xtra Energy is expected to generate 24.25 times less return on investment than Coastal Capital. But when comparing it to its historical volatility, Xtra Energy Corp is 4.67 times less risky than Coastal Capital. It trades about 0.03 of its potential returns per unit of risk. Coastal Capital Acq is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.06 in Coastal Capital Acq on November 5, 2024 and sell it today you would earn a total of 0.01 from holding Coastal Capital Acq or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Xtra Energy Corp vs. Coastal Capital Acq
Performance |
| Timeline |
| Xtra Energy Corp |
| Coastal Capital Acq |
Xtra Energy and Coastal Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtra Energy and Coastal Capital
The main advantage of trading using opposite Xtra Energy and Coastal Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtra Energy position performs unexpectedly, Coastal Capital 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 Coastal Capital will offset losses from the drop in Coastal Capital's long position.| Xtra Energy vs. XCana Petroleum | Xtra Energy vs. New Generation Consumer | Xtra Energy vs. Arsenal Digital Holdings | Xtra Energy vs. UHF Logistics Group |
| Coastal Capital vs. LiveChain | Coastal Capital vs. CLST Holdings | Coastal Capital vs. Premier Products Group | Coastal Capital vs. Jadeart 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |