Correlation Between Plaza Retail and Electra Battery
Can any of the company-specific risk be diversified away by investing in both Plaza Retail 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 Plaza Retail and Electra Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Retail REIT and Electra Battery Materials, you can compare the effects of market volatilities on Plaza Retail 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 Plaza Retail with a short position of Electra Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and Electra Battery.
Diversification Opportunities for Plaza Retail and Electra Battery
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plaza and Electra is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT 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 Plaza Retail 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 Plaza Retail REIT 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 Plaza Retail i.e., Plaza Retail and Electra Battery go up and down completely randomly.
Pair Corralation between Plaza Retail and Electra Battery
Assuming the 90 days trading horizon Plaza Retail REIT is expected to under-perform the Electra Battery. But the stock apears to be less risky and, when comparing its historical volatility, Plaza Retail REIT is 78.2 times less risky than Electra Battery. The stock trades about -0.05 of its potential returns per unit of risk. The Electra Battery Materials is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 54.00 in Electra Battery Materials on October 21, 2024 and sell it today you would earn a total of 165.00 from holding Electra Battery Materials or generate 305.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plaza Retail REIT vs. Electra Battery Materials
Performance |
| Timeline |
| Plaza Retail REIT |
| Electra Battery Materials |
Plaza Retail and Electra Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Retail and Electra Battery
The main advantage of trading using opposite Plaza Retail and Electra Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail 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.| Plaza Retail vs. Automotive Properties Real | Plaza Retail vs. BTB Real Estate | Plaza Retail vs. CT Real Estate | Plaza Retail vs. Choice Properties Real |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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