Correlation Between Faction Investment and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Faction Investment and Ballard Power 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 Faction Investment and Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faction Investment Group and Ballard Power Systems, you can compare the effects of market volatilities on Faction Investment and Ballard Power 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 Faction Investment with a short position of Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faction Investment and Ballard Power.
Diversification Opportunities for Faction Investment and Ballard Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Faction and Ballard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Faction Investment Group and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Faction Investment 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 Faction Investment Group are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Faction Investment i.e., Faction Investment and Ballard Power go up and down completely randomly.
Pair Corralation between Faction Investment and Ballard Power
Assuming the 90 days trading horizon Faction Investment Group is expected to generate 1.54 times more return on investment than Ballard Power. However, Faction Investment is 1.54 times more volatile than Ballard Power Systems. It trades about -0.02 of its potential returns per unit of risk. Ballard Power Systems is currently generating about -0.05 per unit of risk. If you would invest 10.00 in Faction Investment Group on September 12, 2024 and sell it today you would lose (8.50) from holding Faction Investment Group or give up 85.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faction Investment Group vs. Ballard Power Systems
Performance |
| Timeline |
| Faction Investment |
| Ballard Power Systems |
Faction Investment and Ballard Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faction Investment and Ballard Power
The main advantage of trading using opposite Faction Investment and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faction Investment position performs unexpectedly, Ballard Power 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 Ballard Power will offset losses from the drop in Ballard Power's long position.| Faction Investment vs. Brompton Lifeco Split | Faction Investment vs. North American Financial | Faction Investment vs. Prime Dividend Corp | Faction Investment vs. Financial 15 Split |
| Ballard Power vs. Nicola Mining | Ballard Power vs. Atrium Mortgage Investment | Ballard Power vs. Faction Investment Group | Ballard Power vs. Arbor Metals Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |