Correlation Between Foothills Exploration and Cross Timbers

Can any of the company-specific risk be diversified away by investing in both Foothills Exploration and Cross Timbers 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 Foothills Exploration and Cross Timbers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Foothills Exploration and Cross Timbers Royalty, you can compare the effects of market volatilities on Foothills Exploration and Cross Timbers 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 Foothills Exploration with a short position of Cross Timbers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foothills Exploration and Cross Timbers.

Diversification Opportunities for Foothills Exploration and Cross Timbers

0.0

Correlation Coefficient

Foothills Exploration  Cross Timbers

Pay attention - limited upside

The 3 months correlation between Foothills and Cross is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Foothills Exploration and Cross Timbers Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cross Timbers Royalty and Foothills Exploration 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 Foothills Exploration are associated (or correlated) with Cross Timbers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cross Timbers Royalty has no effect on the direction of Foothills Exploration i.e., Foothills Exploration and Cross Timbers go up and down completely randomly.

Pair Corralation between Foothills Exploration and Cross Timbers

If you would invest  913.00  in Cross Timbers Royalty on September 17, 2024 and sell it today you would earn a total of  98.00  from holding Cross Timbers Royalty or generate 10.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Foothills Exploration  vs.  Cross Timbers Royalty

Foothills Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foothills Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Foothills Exploration is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Cross Timbers Royalty

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cross Timbers Royalty are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cross Timbers may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Foothills Exploration and Cross Timbers

The main advantage of trading using opposite Foothills Exploration and Cross Timbers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foothills Exploration position performs unexpectedly, Cross Timbers 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 Cross Timbers will offset losses from the drop in Cross Timbers' long position.

The idea behind Foothills Exploration and Cross Timbers Royalty pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.