Correlation Between Neo Battery and Group Eleven
Can any of the company-specific risk be diversified away by investing in both Neo Battery and Group Eleven 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 Neo Battery and Group Eleven into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neo Battery Materials and Group Eleven Resources, you can compare the effects of market volatilities on Neo Battery and Group Eleven 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 Neo Battery with a short position of Group Eleven. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neo Battery and Group Eleven.
Diversification Opportunities for Neo Battery and Group Eleven
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Neo and Group is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Neo Battery Materials and Group Eleven Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Eleven Resources and Neo 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 Neo Battery Materials are associated (or correlated) with Group Eleven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Eleven Resources has no effect on the direction of Neo Battery i.e., Neo Battery and Group Eleven go up and down completely randomly.
Pair Corralation between Neo Battery and Group Eleven
Assuming the 90 days horizon Neo Battery Materials is expected to under-perform the Group Eleven. In addition to that, Neo Battery is 1.35 times more volatile than Group Eleven Resources. It trades about -0.13 of its total potential returns per unit of risk. Group Eleven Resources is currently generating about 0.1 per unit of volatility. If you would invest 13.00 in Group Eleven Resources on December 1, 2024 and sell it today you would earn a total of 1.00 from holding Group Eleven Resources or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neo Battery Materials vs. Group Eleven Resources
Performance |
| Timeline |
| Neo Battery Materials |
| Group Eleven Resources |
Neo Battery and Group Eleven Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neo Battery and Group Eleven
The main advantage of trading using opposite Neo Battery and Group Eleven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Battery position performs unexpectedly, Group Eleven 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 Group Eleven will offset losses from the drop in Group Eleven's long position.| Neo Battery vs. Pampa Metals | Neo Battery vs. Pegasus Resources | Neo Battery vs. Red Moon Resources | Neo Battery vs. Sherritt International |
| Group Eleven vs. Tinka Resources Limited | Group Eleven vs. Neo Battery Materials | Group Eleven vs. United States Antimony | Group Eleven vs. NioCorp Developments Ltd |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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