Correlation Between Electra Battery and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Electra Battery and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on Electra Battery and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and Canlan Ice.
Diversification Opportunities for Electra Battery and Canlan Ice
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electra and Canlan is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Electra Battery i.e., Electra Battery and Canlan Ice go up and down completely randomly.
Pair Corralation between Electra Battery and Canlan Ice
Assuming the 90 days trading horizon Electra Battery Materials is expected to generate 2.6 times more return on investment than Canlan Ice. However, Electra Battery is 2.6 times more volatile than Canlan Ice Sports. It trades about 0.02 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.01 per unit of risk. If you would invest 74.00 in Electra Battery Materials on August 27, 2024 and sell it today you would lose (3.00) from holding Electra Battery Materials or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Battery Materials vs. Canlan Ice Sports
Performance |
| Timeline |
| Electra Battery Materials |
| Canlan Ice Sports |
Electra Battery and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and Canlan Ice
The main advantage of trading using opposite Electra Battery and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Electra Battery vs. Frontier Lithium | Electra Battery vs. Electra Battery Materials | Electra Battery vs. E3 Lithium | Electra Battery vs. Canada Nickel |
| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Madison Pacific Properties |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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