Correlation Between Electra Battery and Apple
Can any of the company-specific risk be diversified away by investing in both Electra Battery and Apple 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 Electra Battery and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra Battery Materials and Apple Inc CDR, you can compare the effects of market volatilities on Electra Battery and Apple 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 Electra Battery with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and Apple.
Diversification Opportunities for Electra Battery and Apple
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electra and Apple is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and Electra 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 Electra Battery Materials are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of Electra Battery i.e., Electra Battery and Apple go up and down completely randomly.
Pair Corralation between Electra Battery and Apple
Assuming the 90 days trading horizon Electra Battery Materials is expected to under-perform the Apple. In addition to that, Electra Battery is 3.82 times more volatile than Apple Inc CDR. It trades about -0.36 of its total potential returns per unit of risk. Apple Inc CDR is currently generating about 0.55 per unit of volatility. If you would invest 3,368 in Apple Inc CDR on September 23, 2024 and sell it today you would earn a total of 363.00 from holding Apple Inc CDR or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Battery Materials vs. Apple Inc CDR
Performance |
| Timeline |
| Electra Battery Materials |
| Apple Inc CDR |
Electra Battery and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and Apple
The main advantage of trading using opposite Electra Battery and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Electra Battery vs. Frontier Lithium | Electra Battery vs. Electra Battery Materials | Electra Battery vs. E3 Lithium | Electra Battery vs. Canada Nickel |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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