Correlation Between Advent Wireless and ExGen Resources
Can any of the company-specific risk be diversified away by investing in both Advent Wireless and ExGen 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 Advent Wireless and ExGen Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advent Wireless and ExGen Resources, you can compare the effects of market volatilities on Advent Wireless and ExGen 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 Advent Wireless with a short position of ExGen Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Wireless and ExGen Resources.
Diversification Opportunities for Advent Wireless and ExGen Resources
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advent and ExGen is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Advent Wireless and ExGen Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExGen Resources and Advent Wireless 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 Advent Wireless are associated (or correlated) with ExGen Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExGen Resources has no effect on the direction of Advent Wireless i.e., Advent Wireless and ExGen Resources go up and down completely randomly.
Pair Corralation between Advent Wireless and ExGen Resources
Assuming the 90 days horizon Advent Wireless is expected to generate 4.05 times less return on investment than ExGen Resources. But when comparing it to its historical volatility, Advent Wireless is 3.42 times less risky than ExGen Resources. It trades about 0.03 of its potential returns per unit of risk. ExGen Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11.00 in ExGen Resources on October 25, 2024 and sell it today you would lose (5.00) from holding ExGen Resources or give up 45.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Advent Wireless vs. ExGen Resources
Performance |
Timeline |
Advent Wireless |
ExGen Resources |
Advent Wireless and ExGen Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advent Wireless and ExGen Resources
The main advantage of trading using opposite Advent Wireless and ExGen Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Wireless position performs unexpectedly, ExGen 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 ExGen Resources will offset losses from the drop in ExGen Resources' long position.Advent Wireless vs. Datable Technology Corp | Advent Wireless vs. Richelieu Hardware | Advent Wireless vs. Micron Technology, | Advent Wireless vs. Information Services |
ExGen Resources vs. AGF Management Limited | ExGen Resources vs. Cogeco Communications | ExGen Resources vs. Brookfield Asset Management | ExGen Resources vs. Champion Gaming 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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