Correlation Between Ilika Plc and Novonix
Can any of the company-specific risk be diversified away by investing in both Ilika Plc and Novonix 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 Ilika Plc and Novonix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ilika plc and Novonix, you can compare the effects of market volatilities on Ilika Plc and Novonix 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 Ilika Plc with a short position of Novonix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ilika Plc and Novonix.
Diversification Opportunities for Ilika Plc and Novonix
Very good diversification
The 3 months correlation between Ilika and Novonix is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ilika plc and Novonix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novonix and Ilika Plc 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 Ilika plc are associated (or correlated) with Novonix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novonix has no effect on the direction of Ilika Plc i.e., Ilika Plc and Novonix go up and down completely randomly.
Pair Corralation between Ilika Plc and Novonix
Assuming the 90 days horizon Ilika Plc is expected to generate 1.25 times less return on investment than Novonix. But when comparing it to its historical volatility, Ilika plc is 1.54 times less risky than Novonix. It trades about 0.09 of its potential returns per unit of risk. Novonix is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 47.00 in Novonix on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Novonix or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ilika plc vs. Novonix
Performance |
| Timeline |
| Ilika plc |
| Novonix |
Ilika Plc and Novonix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ilika Plc and Novonix
The main advantage of trading using opposite Ilika Plc and Novonix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ilika Plc position performs unexpectedly, Novonix 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 Novonix will offset losses from the drop in Novonix's long position.| Ilika Plc vs. Novonix Ltd ADR | Ilika Plc vs. Magnis Energy Technologies | Ilika Plc vs. Exro Technologies | Ilika Plc vs. FuelPositive Corp |
| Novonix vs. Flux Power Holdings | Novonix vs. NeoVolta Common Stock | Novonix vs. Magnis Energy Technologies | Novonix vs. Espey Mfg Electronics |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |