Correlation Between Excelsior Mining and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both Excelsior Mining and Cogeco Communications 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 Excelsior Mining and Cogeco Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelsior Mining Corp and Cogeco Communications, you can compare the effects of market volatilities on Excelsior Mining and Cogeco Communications 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 Excelsior Mining with a short position of Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Mining and Cogeco Communications.
Diversification Opportunities for Excelsior Mining and Cogeco Communications
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Excelsior and Cogeco is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Mining Corp and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications and Excelsior Mining 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 Excelsior Mining Corp are associated (or correlated) with Cogeco Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Communications has no effect on the direction of Excelsior Mining i.e., Excelsior Mining and Cogeco Communications go up and down completely randomly.
Pair Corralation between Excelsior Mining and Cogeco Communications
Assuming the 90 days trading horizon Excelsior Mining Corp is expected to generate 6.86 times more return on investment than Cogeco Communications. However, Excelsior Mining is 6.86 times more volatile than Cogeco Communications. It trades about 0.08 of its potential returns per unit of risk. Cogeco Communications is currently generating about 0.18 per unit of risk. If you would invest 15.00 in Excelsior Mining Corp on September 6, 2024 and sell it today you would earn a total of 4.00 from holding Excelsior Mining Corp or generate 26.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Excelsior Mining Corp vs. Cogeco Communications
Performance |
Timeline |
Excelsior Mining Corp |
Cogeco Communications |
Excelsior Mining and Cogeco Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Excelsior Mining and Cogeco Communications
The main advantage of trading using opposite Excelsior Mining and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Mining position performs unexpectedly, Cogeco Communications 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 Cogeco Communications will offset losses from the drop in Cogeco Communications' long position.Excelsior Mining vs. RTG Mining | Excelsior Mining vs. Nubian Resources | Excelsior Mining vs. Fremont Gold | Excelsior Mining vs. Royal Road Minerals |
Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. Quebecor | Cogeco Communications vs. Transcontinental | Cogeco Communications vs. Stella Jones |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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