Correlation Between First Quantum and Xtract One
Can any of the company-specific risk be diversified away by investing in both First Quantum and Xtract One 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 First Quantum and Xtract One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Quantum Minerals and Xtract One Technologies, you can compare the effects of market volatilities on First Quantum and Xtract One 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 First Quantum with a short position of Xtract One. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Quantum and Xtract One.
Diversification Opportunities for First Quantum and Xtract One
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Xtract is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding First Quantum Minerals and Xtract One Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtract One Technologies and First Quantum 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 First Quantum Minerals are associated (or correlated) with Xtract One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtract One Technologies has no effect on the direction of First Quantum i.e., First Quantum and Xtract One go up and down completely randomly.
Pair Corralation between First Quantum and Xtract One
Assuming the 90 days horizon First Quantum Minerals is expected to generate 0.51 times more return on investment than Xtract One. However, First Quantum Minerals is 1.95 times less risky than Xtract One. It trades about 0.2 of its potential returns per unit of risk. Xtract One Technologies is currently generating about 0.09 per unit of risk. If you would invest 2,370 in First Quantum Minerals on August 31, 2025 and sell it today you would earn a total of 814.00 from holding First Quantum Minerals or generate 34.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Quantum Minerals vs. Xtract One Technologies
Performance |
| Timeline |
| First Quantum Minerals |
| Xtract One Technologies |
First Quantum and Xtract One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Quantum and Xtract One
The main advantage of trading using opposite First Quantum and Xtract One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Quantum position performs unexpectedly, Xtract One 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 Xtract One will offset losses from the drop in Xtract One's long position.| First Quantum vs. Xtract One Technologies | First Quantum vs. North American Construction | First Quantum vs. CVW CleanTech | First Quantum vs. Brookfield Office Properties |
| Xtract One vs. Omineca Mining and | Xtract One vs. Computer Modelling Group | Xtract One vs. Western Copper and | Xtract One vs. NeXGold Mining Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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