Correlation Between Group 6 and Patriot Battery
Can any of the company-specific risk be diversified away by investing in both Group 6 and Patriot 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 Group 6 and Patriot Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 6 Metals and Patriot Battery Metals, you can compare the effects of market volatilities on Group 6 and Patriot 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 Group 6 with a short position of Patriot Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Patriot Battery.
Diversification Opportunities for Group 6 and Patriot Battery
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Group and Patriot is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals and Patriot Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patriot Battery Metals and Group 6 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 Group 6 Metals are associated (or correlated) with Patriot Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patriot Battery Metals has no effect on the direction of Group 6 i.e., Group 6 and Patriot Battery go up and down completely randomly.
Pair Corralation between Group 6 and Patriot Battery
If you would invest 2.50 in Group 6 Metals on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Group 6 Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 6 Metals vs. Patriot Battery Metals
Performance |
| Timeline |
| Group 6 Metals |
| Patriot Battery Metals |
Group 6 and Patriot Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and Patriot Battery
The main advantage of trading using opposite Group 6 and Patriot Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 position performs unexpectedly, Patriot 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 Patriot Battery will offset losses from the drop in Patriot Battery's long position.| Group 6 vs. Aussie Broadband | Group 6 vs. Regal Investment | Group 6 vs. Carlton Investments | Group 6 vs. Pinnacle Investment Management |
| Patriot Battery vs. Northern Star Resources | Patriot Battery vs. Evolution Mining | Patriot Battery vs. Bluescope Steel | Patriot Battery vs. De Grey Mining |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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