Correlation Between Noram Lithium and Electra Battery
Can any of the company-specific risk be diversified away by investing in both Noram Lithium 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 Noram Lithium and Electra Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noram Lithium Corp and Electra Battery Materials, you can compare the effects of market volatilities on Noram Lithium 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 Noram Lithium with a short position of Electra Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noram Lithium and Electra Battery.
Diversification Opportunities for Noram Lithium and Electra Battery
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Noram and Electra is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Noram Lithium Corp 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 Noram Lithium 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 Noram Lithium Corp 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 Noram Lithium i.e., Noram Lithium and Electra Battery go up and down completely randomly.
Pair Corralation between Noram Lithium and Electra Battery
If you would invest 0.00 in Noram Lithium Corp on January 13, 2025 and sell it today you would earn a total of 0.00 from holding Noram Lithium Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Noram Lithium Corp vs. Electra Battery Materials
Performance |
| Timeline |
| Noram Lithium Corp |
Risk-Adjusted Performance
Insignificant
Weak | Strong |
| Electra Battery Materials |
Noram Lithium and Electra Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noram Lithium and Electra Battery
The main advantage of trading using opposite Noram Lithium and Electra Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noram Lithium 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.| Noram Lithium vs. Iconic Minerals | Noram Lithium vs. Imagine Lithium | Noram Lithium vs. Grid Metals Corp | Noram Lithium vs. New Age Metals |
| Electra Battery vs. Frontier Lithium | Electra Battery vs. Electra Battery Materials | Electra Battery vs. E3 Lithium | Electra Battery vs. Canada Nickel |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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