Correlation Between Electra Battery and Sierra Metals
Can any of the company-specific risk be diversified away by investing in both Electra Battery and Sierra Metals 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 Sierra Metals 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 Sierra Metals, you can compare the effects of market volatilities on Electra Battery and Sierra Metals 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 Sierra Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and Sierra Metals.
Diversification Opportunities for Electra Battery and Sierra Metals
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electra and Sierra is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials and Sierra Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Metals 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 Sierra Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Metals has no effect on the direction of Electra Battery i.e., Electra Battery and Sierra Metals go up and down completely randomly.
Pair Corralation between Electra Battery and Sierra Metals
If you would invest 31.00 in Sierra Metals on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Sierra Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Electra Battery Materials vs. Sierra Metals
Performance |
| Timeline |
| Electra Battery Materials |
| Sierra Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Electra Battery and Sierra Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and Sierra Metals
The main advantage of trading using opposite Electra Battery and Sierra Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery position performs unexpectedly, Sierra Metals 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 Sierra Metals will offset losses from the drop in Sierra Metals' long position.| Electra Battery vs. Cobalt Blue Holdings | Electra Battery vs. Bradda Head Lithium | Electra Battery vs. ioneer | Electra Battery vs. Tearlach Resources Limited |
| Sierra Metals vs. Kenorland Minerals | Sierra Metals vs. Canstar Resources | Sierra Metals vs. Prime Mining Corp | Sierra Metals vs. Euro Manganese |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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