Correlation Between Xtract One and BCM Resources
Can any of the company-specific risk be diversified away by investing in both Xtract One and BCM Resources 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 Xtract One and BCM Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtract One Technologies and BCM Resources Corp, you can compare the effects of market volatilities on Xtract One and BCM Resources 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 Xtract One with a short position of BCM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and BCM Resources.
Diversification Opportunities for Xtract One and BCM Resources
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtract and BCM is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and BCM Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCM Resources Corp and Xtract One 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 Xtract One Technologies are associated (or correlated) with BCM Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCM Resources Corp has no effect on the direction of Xtract One i.e., Xtract One and BCM Resources go up and down completely randomly.
Pair Corralation between Xtract One and BCM Resources
Assuming the 90 days trading horizon Xtract One is expected to generate 3.71 times less return on investment than BCM Resources. But when comparing it to its historical volatility, Xtract One Technologies is 2.17 times less risky than BCM Resources. It trades about 0.02 of its potential returns per unit of risk. BCM Resources Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8.00 in BCM Resources Corp on September 18, 2024 and sell it today you would lose (3.50) from holding BCM Resources Corp or give up 43.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtract One Technologies vs. BCM Resources Corp
Performance |
| Timeline |
| Xtract One Technologies |
| BCM Resources Corp |
Xtract One and BCM Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtract One and BCM Resources
The main advantage of trading using opposite Xtract One and BCM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtract One position performs unexpectedly, BCM Resources 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 BCM Resources will offset losses from the drop in BCM Resources' long position.| Xtract One vs. Emerge Commerce | Xtract One vs. Quisitive Technology Solutions | Xtract One vs. DGTL Holdings | Xtract One vs. Plurilock Security |
| BCM Resources vs. Xtract One Technologies | BCM Resources vs. Firan Technology Group | BCM Resources vs. Bip Investment Corp | BCM Resources vs. Solid Impact Investments |
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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