Correlation Between International Battery and Critical Elements
Can any of the company-specific risk be diversified away by investing in both International Battery and Critical Elements 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 International Battery and Critical Elements into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Battery Metals and Critical Elements, you can compare the effects of market volatilities on International Battery and Critical Elements 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 International Battery with a short position of Critical Elements. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Battery and Critical Elements.
Diversification Opportunities for International Battery and Critical Elements
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Critical is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding International Battery Metals and Critical Elements in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Critical Elements and International Battery 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 International Battery Metals are associated (or correlated) with Critical Elements. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Critical Elements has no effect on the direction of International Battery i.e., International Battery and Critical Elements go up and down completely randomly.
Pair Corralation between International Battery and Critical Elements
Assuming the 90 days horizon International Battery Metals is expected to under-perform the Critical Elements. In addition to that, International Battery is 1.56 times more volatile than Critical Elements. It trades about -0.13 of its total potential returns per unit of risk. Critical Elements is currently generating about -0.09 per unit of volatility. If you would invest 60.00 in Critical Elements on September 3, 2024 and sell it today you would lose (31.00) from holding Critical Elements or give up 51.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Battery Metals vs. Critical Elements
Performance |
| Timeline |
| International Battery |
| Critical Elements |
International Battery and Critical Elements Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Battery and Critical Elements
The main advantage of trading using opposite International Battery and Critical Elements positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Battery position performs unexpectedly, Critical Elements 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 Critical Elements will offset losses from the drop in Critical Elements' long position.| International Battery vs. Savannah Resources Plc | International Battery vs. Tartisan Nickel Corp | International Battery vs. Critical Elements | International Battery vs. Lithium Energi Exploration |
| Critical Elements vs. Advantage Solutions | Critical Elements vs. Atlas Corp | Critical Elements vs. PureCycle Technologies | Critical Elements vs. WM Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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