Correlation Between Global Battery and Ardiden
Can any of the company-specific risk be diversified away by investing in both Global Battery and Ardiden 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 Global Battery and Ardiden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Battery Metals and Ardiden Limited, you can compare the effects of market volatilities on Global Battery and Ardiden 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 Global Battery with a short position of Ardiden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Battery and Ardiden.
Diversification Opportunities for Global Battery and Ardiden
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Ardiden is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Global Battery Metals and Ardiden Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardiden Limited and Global 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 Global Battery Metals are associated (or correlated) with Ardiden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardiden Limited has no effect on the direction of Global Battery i.e., Global Battery and Ardiden go up and down completely randomly.
Pair Corralation between Global Battery and Ardiden
Assuming the 90 days horizon Global Battery Metals is expected to generate 0.74 times more return on investment than Ardiden. However, Global Battery Metals is 1.35 times less risky than Ardiden. It trades about -0.01 of its potential returns per unit of risk. Ardiden Limited is currently generating about -0.3 per unit of risk. If you would invest 1.85 in Global Battery Metals on September 23, 2024 and sell it today you would lose (0.45) from holding Global Battery Metals or give up 24.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Global Battery Metals vs. Ardiden Limited
Performance |
| Timeline |
| Global Battery Metals |
| Ardiden Limited |
Global Battery and Ardiden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Battery and Ardiden
The main advantage of trading using opposite Global Battery and Ardiden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Battery position performs unexpectedly, Ardiden 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 Ardiden will offset losses from the drop in Ardiden's long position.| Global Battery vs. Altair International Corp | Global Battery vs. Lake Resources NL | Global Battery vs. Jourdan Resources | Global Battery vs. Lomiko Metals |
| Ardiden vs. Altair International Corp | Ardiden vs. Global Battery Metals | Ardiden vs. Lake Resources NL | Ardiden vs. Jourdan Resources |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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