Correlation Between Electra Battery and Themac Resources
Can any of the company-specific risk be diversified away by investing in both Electra Battery and Themac Resources 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 Themac Resources 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 Themac Resources Group, you can compare the effects of market volatilities on Electra Battery and Themac Resources 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 Themac Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and Themac Resources.
Diversification Opportunities for Electra Battery and Themac Resources
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Electra and Themac is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials and Themac Resources Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themac Resources 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 Themac Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themac Resources has no effect on the direction of Electra Battery i.e., Electra Battery and Themac Resources go up and down completely randomly.
Pair Corralation between Electra Battery and Themac Resources
Assuming the 90 days trading horizon Electra Battery Materials is expected to generate 0.29 times more return on investment than Themac Resources. However, Electra Battery Materials is 3.51 times less risky than Themac Resources. It trades about -0.2 of its potential returns per unit of risk. Themac Resources Group is currently generating about -0.09 per unit of risk. If you would invest 75.00 in Electra Battery Materials on September 5, 2024 and sell it today you would lose (9.00) from holding Electra Battery Materials or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Electra Battery Materials vs. Themac Resources Group
Performance |
| Timeline |
| Electra Battery Materials |
| Themac Resources |
Electra Battery and Themac Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and Themac Resources
The main advantage of trading using opposite Electra Battery and Themac Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery position performs unexpectedly, Themac Resources 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 Themac Resources will offset losses from the drop in Themac Resources' 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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