Correlation Between Aqua Metals and American Battery
Can any of the company-specific risk be diversified away by investing in both Aqua Metals and American Battery 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 Aqua Metals and American Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqua Metals and American Battery Metals, you can compare the effects of market volatilities on Aqua Metals and American Battery 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 Aqua Metals with a short position of American Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqua Metals and American Battery.
Diversification Opportunities for Aqua Metals and American Battery
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqua and American is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aqua Metals and American Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Battery Metals and Aqua Metals 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 Aqua Metals are associated (or correlated) with American Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Battery Metals has no effect on the direction of Aqua Metals i.e., Aqua Metals and American Battery go up and down completely randomly.
Pair Corralation between Aqua Metals and American Battery
If you would invest 68.00 in American Battery Metals on August 29, 2024 and sell it today you would earn a total of 0.00 from holding American Battery Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.33% |
| Values | Daily Returns |
Aqua Metals vs. American Battery Metals
Performance |
| Timeline |
| Aqua Metals |
| American Battery Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aqua Metals and American Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqua Metals and American Battery
The main advantage of trading using opposite Aqua Metals and American Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqua Metals position performs unexpectedly, American Battery 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 American Battery will offset losses from the drop in American Battery's long position.| Aqua Metals vs. LanzaTech Global | Aqua Metals vs. Waste Management | Aqua Metals vs. Clean Harbors | Aqua Metals vs. Casella Waste Systems |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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