Correlation Between Europac Gold and XPLR Infrastructure

Can any of the company-specific risk be diversified away by investing in both Europac Gold and XPLR Infrastructure 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 Europac Gold and XPLR Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Europac Gold Fund and XPLR Infrastructure LP, you can compare the effects of market volatilities on Europac Gold and XPLR Infrastructure 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 Europac Gold with a short position of XPLR Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and XPLR Infrastructure.

Diversification Opportunities for Europac Gold and XPLR Infrastructure

-0.49

Correlation Coefficient

Europac Gold  XPLR Infrastructure

Very good diversification

The 3 months correlation between Europac and XPLR is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and XPLR Infrastructure LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XPLR Infrastructure and Europac Gold 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 Europac Gold Fund are associated (or correlated) with XPLR Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XPLR Infrastructure has no effect on the direction of Europac Gold i.e., Europac Gold and XPLR Infrastructure go up and down completely randomly.

Pair Corralation between Europac Gold and XPLR Infrastructure

Assuming the 90 days horizon Europac Gold Fund is expected to generate 0.71 times more return on investment than XPLR Infrastructure. However, Europac Gold Fund is 1.42 times less risky than XPLR Infrastructure. It trades about 0.13 of its potential returns per unit of risk. XPLR Infrastructure LP is currently generating about -0.11 per unit of risk. If you would invest  1,154  in Europac Gold Fund on January 30, 2025 and sell it today you would earn a total of  85.00  from holding Europac Gold Fund or generate 7.37% return on investment over 90 days.

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

Europac Gold Fund  vs.  XPLR Infrastructure LP

Europac Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Europac Gold Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Europac Gold showed solid returns over the last few months and may actually be approaching a breakup point.

XPLR Infrastructure

Risk-Adjusted Performance

Very Weak

Over the last 90 days XPLR Infrastructure LP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Europac Gold and XPLR Infrastructure

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

The idea behind Europac Gold Fund and XPLR Infrastructure LP 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.