Correlation Between Electra Battery and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both Electra Battery and Canaf Investments 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 Canaf Investments 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 Canaf Investments, you can compare the effects of market volatilities on Electra Battery and Canaf Investments 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 Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and Canaf Investments.
Diversification Opportunities for Electra Battery and Canaf Investments
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electra and Canaf is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments 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 Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Electra Battery i.e., Electra Battery and Canaf Investments go up and down completely randomly.
Pair Corralation between Electra Battery and Canaf Investments
Assuming the 90 days trading horizon Electra Battery Materials is expected to under-perform the Canaf Investments. In addition to that, Electra Battery is 1.42 times more volatile than Canaf Investments. It trades about 0.0 of its total potential returns per unit of risk. Canaf Investments is currently generating about 0.08 per unit of volatility. If you would invest 14.00 in Canaf Investments on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Canaf Investments or generate 107.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Battery Materials vs. Canaf Investments
Performance |
| Timeline |
| Electra Battery Materials |
| Canaf Investments |
Electra Battery and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and Canaf Investments
The main advantage of trading using opposite Electra Battery and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| Electra Battery vs. Ressources Minieres Radisson | Electra Battery vs. Galantas Gold Corp | Electra Battery vs. Red Pine Exploration | Electra Battery vs. Kore Mining |
| Canaf Investments vs. Ressources Minieres Radisson | Canaf Investments vs. Galantas Gold Corp | Canaf Investments vs. Red Pine Exploration | Canaf Investments vs. Kore Mining |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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