Correlation Between Falcon Energy and Electra Battery
Can any of the company-specific risk be diversified away by investing in both Falcon Energy 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 Falcon Energy and Electra Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Energy Materials and Electra Battery Materials, you can compare the effects of market volatilities on Falcon Energy 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 Falcon Energy with a short position of Electra Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Energy and Electra Battery.
Diversification Opportunities for Falcon Energy and Electra Battery
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Falcon and Electra is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Energy Materials 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 Falcon Energy 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 Falcon Energy Materials 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 Falcon Energy i.e., Falcon Energy and Electra Battery go up and down completely randomly.
Pair Corralation between Falcon Energy and Electra Battery
Assuming the 90 days trading horizon Falcon Energy Materials is expected to generate 1.65 times more return on investment than Electra Battery. However, Falcon Energy is 1.65 times more volatile than Electra Battery Materials. It trades about 0.24 of its potential returns per unit of risk. Electra Battery Materials is currently generating about -0.1 per unit of risk. If you would invest 68.00 in Falcon Energy Materials on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Falcon Energy Materials or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Energy Materials vs. Electra Battery Materials
Performance |
| Timeline |
| Falcon Energy Materials |
| Electra Battery Materials |
Falcon Energy and Electra Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Energy and Electra Battery
The main advantage of trading using opposite Falcon Energy and Electra Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Energy 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.| Falcon Energy vs. Maple Peak Investments | Falcon Energy vs. 2028 Investment Grade | Falcon Energy vs. Solid Impact Investments | Falcon Energy vs. Canaf Investments |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |