Correlation Between Xtra Energy and Gemz Corp
Can any of the company-specific risk be diversified away by investing in both Xtra Energy and Gemz Corp 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 Gemz Corp 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 Gemz Corp, you can compare the effects of market volatilities on Xtra Energy and Gemz Corp 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 Gemz Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtra Energy and Gemz Corp.
Diversification Opportunities for Xtra Energy and Gemz Corp
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xtra and Gemz is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Xtra Energy Corp and Gemz Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemz Corp 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 Gemz Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemz Corp has no effect on the direction of Xtra Energy i.e., Xtra Energy and Gemz Corp go up and down completely randomly.
Pair Corralation between Xtra Energy and Gemz Corp
Given the investment horizon of 90 days Xtra Energy Corp is expected to under-perform the Gemz Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Xtra Energy Corp is 2.12 times less risky than Gemz Corp. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Gemz Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Gemz Corp on August 31, 2024 and sell it today you would earn a total of 0.01 from holding Gemz Corp or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtra Energy Corp vs. Gemz Corp
Performance |
| Timeline |
| Xtra Energy Corp |
| Gemz Corp |
Xtra Energy and Gemz Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtra Energy and Gemz Corp
The main advantage of trading using opposite Xtra Energy and Gemz Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtra Energy position performs unexpectedly, Gemz Corp 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 Gemz Corp will offset losses from the drop in Gemz Corp'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 |
| Gemz Corp vs. A1 Group | Gemz Corp vs. Xtra Energy Corp | Gemz Corp vs. Biopower Operations Corp | Gemz Corp vs. New Generation Consumer |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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