Correlation Between Excelsior Mining and Enbridge F

Can any of the company-specific risk be diversified away by investing in both Excelsior Mining and Enbridge F 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 Enbridge F 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 Enbridge F Cum, you can compare the effects of market volatilities on Excelsior Mining and Enbridge F 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 Enbridge F. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Mining and Enbridge F.

Diversification Opportunities for Excelsior Mining and Enbridge F

0.67

Correlation Coefficient

Excelsior Mining  Enbridge F

Poor diversification

The 3 months correlation between Excelsior and Enbridge is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Mining Corp and Enbridge F Cum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge F Cum 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 Enbridge F. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge F Cum has no effect on the direction of Excelsior Mining i.e., Excelsior Mining and Enbridge F go up and down completely randomly.

Pair Corralation between Excelsior Mining and Enbridge F

Assuming the 90 days trading horizon Excelsior Mining Corp is expected to generate 7.76 times more return on investment than Enbridge F. However, Excelsior Mining is 7.76 times more volatile than Enbridge F Cum. It trades about 0.03 of its potential returns per unit of risk. Enbridge F Cum is currently generating about 0.07 per unit of risk. If you would invest  23.00  in Excelsior Mining Corp on October 11, 2024 and sell it today you would lose (2.00) from holding Excelsior Mining Corp or give up 8.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Excelsior Mining Corp  vs.  Enbridge F Cum

Excelsior Mining Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Excelsior Mining Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Excelsior Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Enbridge F Cum

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge F Cum are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental drivers, Enbridge F may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Excelsior Mining and Enbridge F

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

The idea behind Excelsior Mining Corp and Enbridge F Cum 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.