Correlation Between Faraday Copper and Electra Battery
Can any of the company-specific risk be diversified away by investing in both Faraday Copper and Electra Battery 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 Faraday Copper and Electra Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faraday Copper Corp and Electra Battery Materials, you can compare the effects of market volatilities on Faraday Copper and Electra Battery 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 Faraday Copper with a short position of Electra Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and Electra Battery.
Diversification Opportunities for Faraday Copper and Electra Battery
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Faraday and Electra is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and Electra Battery Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra Battery Materials and Faraday Copper 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 Faraday Copper Corp are associated (or correlated) with Electra Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra Battery Materials has no effect on the direction of Faraday Copper i.e., Faraday Copper and Electra Battery go up and down completely randomly.
Pair Corralation between Faraday Copper and Electra Battery
Assuming the 90 days trading horizon Faraday Copper Corp is expected to generate 0.73 times more return on investment than Electra Battery. However, Faraday Copper Corp is 1.36 times less risky than Electra Battery. It trades about -0.09 of its potential returns per unit of risk. Electra Battery Materials is currently generating about -0.08 per unit of risk. If you would invest 90.00 in Faraday Copper Corp on August 30, 2024 and sell it today you would lose (4.00) from holding Faraday Copper Corp or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Copper Corp vs. Electra Battery Materials
Performance |
| Timeline |
| Faraday Copper Corp |
| Electra Battery Materials |
Faraday Copper and Electra Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and Electra Battery
The main advantage of trading using opposite Faraday Copper and Electra Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper position performs unexpectedly, Electra Battery 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 Electra Battery will offset losses from the drop in Electra Battery's long position.| Faraday Copper vs. Arizona Sonoran Copper | Faraday Copper vs. Filo Mining Corp | Faraday Copper vs. Marimaca Copper Corp | Faraday Copper vs. iShares Canadian HYBrid |
| Electra Battery vs. Frontier Lithium | Electra Battery vs. Electra Battery Materials | Electra Battery vs. E3 Lithium | Electra Battery vs. Canada Nickel |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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