Correlation Between International Battery and Sienna Resources
Can any of the company-specific risk be diversified away by investing in both International Battery and Sienna Resources 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 Sienna Resources 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 Sienna Resources, you can compare the effects of market volatilities on International Battery and Sienna Resources 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 Sienna Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Battery and Sienna Resources.
Diversification Opportunities for International Battery and Sienna Resources
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Sienna is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding International Battery Metals and Sienna Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna Resources 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 Sienna Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Resources has no effect on the direction of International Battery i.e., International Battery and Sienna Resources go up and down completely randomly.
Pair Corralation between International Battery and Sienna Resources
Assuming the 90 days horizon International Battery Metals is expected to under-perform the Sienna Resources. In addition to that, International Battery is 2.69 times more volatile than Sienna Resources. It trades about -0.14 of its total potential returns per unit of risk. Sienna Resources is currently generating about -0.11 per unit of volatility. If you would invest 2.52 in Sienna Resources on September 2, 2024 and sell it today you would lose (0.32) from holding Sienna Resources or give up 12.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
International Battery Metals vs. Sienna Resources
Performance |
| Timeline |
| International Battery |
| Sienna Resources |
International Battery and Sienna Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Battery and Sienna Resources
The main advantage of trading using opposite International Battery and Sienna Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Battery position performs unexpectedly, Sienna Resources 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 Sienna Resources will offset losses from the drop in Sienna Resources' long position.| International Battery vs. ATT Inc | International Battery vs. Merck Company | International Battery vs. Walt Disney | International Battery vs. Caterpillar |
| Sienna Resources vs. South32 Limited | Sienna Resources vs. NioCorp Developments Ltd | Sienna Resources vs. HUMANA INC | Sienna Resources vs. SCOR PK |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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