Correlation Between American Battery and NioCorp Developments
Can any of the company-specific risk be diversified away by investing in both American Battery and NioCorp Developments 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 American Battery and NioCorp Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Battery Technology and NioCorp Developments Ltd, you can compare the effects of market volatilities on American Battery and NioCorp Developments 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 American Battery with a short position of NioCorp Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Battery and NioCorp Developments.
Diversification Opportunities for American Battery and NioCorp Developments
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and NioCorp is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding American Battery Technology and NioCorp Developments Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NioCorp Developments and American Battery 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 American Battery Technology are associated (or correlated) with NioCorp Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NioCorp Developments has no effect on the direction of American Battery i.e., American Battery and NioCorp Developments go up and down completely randomly.
Pair Corralation between American Battery and NioCorp Developments
Given the investment horizon of 90 days American Battery Technology is expected to generate 1.37 times more return on investment than NioCorp Developments. However, American Battery is 1.37 times more volatile than NioCorp Developments Ltd. It trades about -0.04 of its potential returns per unit of risk. NioCorp Developments Ltd is currently generating about -0.37 per unit of risk. If you would invest 100.00 in American Battery Technology on September 1, 2024 and sell it today you would lose (7.00) from holding American Battery Technology or give up 7.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Battery Technology vs. NioCorp Developments Ltd
Performance |
| Timeline |
| American Battery Tec |
| NioCorp Developments |
American Battery and NioCorp Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Battery and NioCorp Developments
The main advantage of trading using opposite American Battery and NioCorp Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Battery position performs unexpectedly, NioCorp Developments 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 NioCorp Developments will offset losses from the drop in NioCorp Developments' long position.| American Battery vs. WEC Energy Group | American Battery vs. Alliant Energy Corp | American Battery vs. Transportadora de Gas | American Battery vs. Boston Beer |
| NioCorp Developments vs. Paiute Oil Mining | NioCorp Developments vs. Marfrig Global Foods | NioCorp Developments vs. Emerson Radio | NioCorp Developments vs. Reservoir Media |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |