Correlation Between Electra Battery and Trilogy Metals
Can any of the company-specific risk be diversified away by investing in both Electra Battery and Trilogy 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 Trilogy 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 Trilogy Metals, you can compare the effects of market volatilities on Electra Battery and Trilogy 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 Trilogy Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and Trilogy Metals.
Diversification Opportunities for Electra Battery and Trilogy Metals
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electra and Trilogy is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials and Trilogy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trilogy 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 Trilogy Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trilogy Metals has no effect on the direction of Electra Battery i.e., Electra Battery and Trilogy Metals go up and down completely randomly.
Pair Corralation between Electra Battery and Trilogy Metals
Given the investment horizon of 90 days Electra Battery Materials is expected to under-perform the Trilogy Metals. But the stock apears to be less risky and, when comparing its historical volatility, Electra Battery Materials is 6.51 times less risky than Trilogy Metals. The stock trades about -0.11 of its potential returns per unit of risk. The Trilogy Metals is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Trilogy Metals on August 28, 2024 and sell it today you would earn a total of 64.00 from holding Trilogy Metals or generate 94.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Battery Materials vs. Trilogy Metals
Performance |
| Timeline |
| Electra Battery Materials |
| Trilogy Metals |
Electra Battery and Trilogy Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and Trilogy Metals
The main advantage of trading using opposite Electra Battery and Trilogy Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery position performs unexpectedly, Trilogy 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 Trilogy Metals will offset losses from the drop in Trilogy Metals' long position.| Electra Battery vs. Vale SA ADR | Electra Battery vs. Teck Resources Ltd | Electra Battery vs. BHP Group Limited | Electra Battery vs. Glencore PLC ADR |
| Trilogy Metals vs. Vale SA ADR | Trilogy Metals vs. Teck Resources Ltd | Trilogy Metals vs. BHP Group Limited | Trilogy Metals vs. Glencore PLC ADR |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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