Correlation Between Electra Battery and Solar Alliance
Can any of the company-specific risk be diversified away by investing in both Electra Battery and Solar Alliance 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 Solar Alliance 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 Solar Alliance Energy, you can compare the effects of market volatilities on Electra Battery and Solar Alliance 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 Solar Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and Solar Alliance.
Diversification Opportunities for Electra Battery and Solar Alliance
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electra and Solar is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials and Solar Alliance Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Alliance Energy 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 Solar Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Alliance Energy has no effect on the direction of Electra Battery i.e., Electra Battery and Solar Alliance go up and down completely randomly.
Pair Corralation between Electra Battery and Solar Alliance
Assuming the 90 days trading horizon Electra Battery Materials is expected to generate 0.37 times more return on investment than Solar Alliance. However, Electra Battery Materials is 2.73 times less risky than Solar Alliance. It trades about 0.14 of its potential returns per unit of risk. Solar Alliance Energy is currently generating about -0.05 per unit of risk. If you would invest 218.00 in Electra Battery Materials on November 29, 2024 and sell it today you would earn a total of 31.00 from holding Electra Battery Materials or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Battery Materials vs. Solar Alliance Energy
Performance |
| Timeline |
| Electra Battery Materials |
| Solar Alliance Energy |
Electra Battery and Solar Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and Solar Alliance
The main advantage of trading using opposite Electra Battery and Solar Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery position performs unexpectedly, Solar Alliance 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 Solar Alliance will offset losses from the drop in Solar Alliance's long position.| Electra Battery vs. Frontier Lithium | Electra Battery vs. Electra Battery Materials | Electra Battery vs. E3 Lithium | Electra Battery vs. Canada Nickel |
| Solar Alliance vs. Braille Energy Systems | Solar Alliance vs. Therma Bright | Solar Alliance vs. CryptoStar Corp | Solar Alliance vs. Manganese X Energy |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |