Correlation Between Geodrill and Electra Battery
Can any of the company-specific risk be diversified away by investing in both Geodrill 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 Geodrill and Electra Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geodrill Limited and Electra Battery Materials, you can compare the effects of market volatilities on Geodrill 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 Geodrill with a short position of Electra Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geodrill and Electra Battery.
Diversification Opportunities for Geodrill and Electra Battery
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geodrill and Electra is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Geodrill Limited 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 Geodrill 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 Geodrill Limited 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 Geodrill i.e., Geodrill and Electra Battery go up and down completely randomly.
Pair Corralation between Geodrill and Electra Battery
Assuming the 90 days trading horizon Geodrill Limited is expected to generate 0.78 times more return on investment than Electra Battery. However, Geodrill Limited is 1.28 times less risky than Electra Battery. It trades about 0.23 of its potential returns per unit of risk. Electra Battery Materials is currently generating about -0.32 per unit of risk. If you would invest 277.00 in Geodrill Limited on September 13, 2024 and sell it today you would earn a total of 35.00 from holding Geodrill Limited or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geodrill Limited vs. Electra Battery Materials
Performance |
| Timeline |
| Geodrill Limited |
| Electra Battery Materials |
Geodrill and Electra Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geodrill and Electra Battery
The main advantage of trading using opposite Geodrill and Electra Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geodrill 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.| Geodrill vs. Stria Lithium | Geodrill vs. Dynacor Gold Mines | Geodrill vs. Foraco International SA | Geodrill vs. Hammond Power Solutions |
| Electra Battery vs. Foraco International SA | Electra Battery vs. Geodrill Limited | Electra Battery vs. Major Drilling Group | Electra Battery vs. Bri Chem 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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