Correlation Between Global Battery and Surge Copper
Can any of the company-specific risk be diversified away by investing in both Global Battery and Surge Copper 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 Surge Copper 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 Surge Copper Corp, you can compare the effects of market volatilities on Global Battery and Surge Copper 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 Surge Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Battery and Surge Copper.
Diversification Opportunities for Global Battery and Surge Copper
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Surge is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Global Battery Metals and Surge Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Copper Corp 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 Surge Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Copper Corp has no effect on the direction of Global Battery i.e., Global Battery and Surge Copper go up and down completely randomly.
Pair Corralation between Global Battery and Surge Copper
Assuming the 90 days horizon Global Battery Metals is expected to generate 1.96 times more return on investment than Surge Copper. However, Global Battery is 1.96 times more volatile than Surge Copper Corp. It trades about 0.03 of its potential returns per unit of risk. Surge Copper Corp is currently generating about -0.02 per unit of risk. If you would invest 2.58 in Global Battery Metals on September 3, 2024 and sell it today you would lose (1.06) from holding Global Battery Metals or give up 41.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
Global Battery Metals vs. Surge Copper Corp
Performance |
| Timeline |
| Global Battery Metals |
| Surge Copper Corp |
Global Battery and Surge Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Battery and Surge Copper
The main advantage of trading using opposite Global Battery and Surge Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Battery position performs unexpectedly, Surge Copper 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 Surge Copper will offset losses from the drop in Surge Copper'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 |
| Surge Copper vs. Pampa Metals | Surge Copper vs. Progressive Planet Solutions | Surge Copper vs. Searchlight Resources | Surge Copper vs. Durango 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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