Correlation Between Xtract One and Lupaka Gold

Can any of the company-specific risk be diversified away by investing in both Xtract One and Lupaka Gold 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 Lupaka Gold 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 Lupaka Gold Corp, you can compare the effects of market volatilities on Xtract One and Lupaka Gold 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 Lupaka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Lupaka Gold.

Diversification Opportunities for Xtract One and Lupaka Gold

-0.1

Correlation Coefficient

Xtract One  Lupaka Gold

Good diversification

The 3 months correlation between Xtract and Lupaka is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Lupaka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupaka Gold 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 Lupaka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupaka Gold Corp has no effect on the direction of Xtract One i.e., Xtract One and Lupaka Gold go up and down completely randomly.

Pair Corralation between Xtract One and Lupaka Gold

Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Lupaka Gold. But the stock apears to be less risky and, when comparing its historical volatility, Xtract One Technologies is 1.43 times less risky than Lupaka Gold. The stock trades about -0.08 of its potential returns per unit of risk. The Lupaka Gold Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6.00  in Lupaka Gold Corp on September 15, 2024 and sell it today you would earn a total of  0.50  from holding Lupaka Gold Corp or generate 8.33% return on investment over 90 days.

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

Xtract One Technologies  vs.  Lupaka Gold Corp

Xtract One Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtract One Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Lupaka Gold Corp

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lupaka Gold Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lupaka Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xtract One and Lupaka Gold

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

The idea behind Xtract One Technologies and Lupaka Gold Corp 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.

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.