Correlation Between Northstar Clean and Electra Battery
Can any of the company-specific risk be diversified away by investing in both Northstar Clean 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 Northstar Clean and Electra Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northstar Clean Technologies and Electra Battery Materials, you can compare the effects of market volatilities on Northstar Clean 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 Northstar Clean with a short position of Electra Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Electra Battery.
Diversification Opportunities for Northstar Clean and Electra Battery
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northstar and Electra is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies 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 Northstar Clean 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 Northstar Clean Technologies 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 Northstar Clean i.e., Northstar Clean and Electra Battery go up and down completely randomly.
Pair Corralation between Northstar Clean and Electra Battery
Assuming the 90 days trading horizon Northstar Clean Technologies is expected to under-perform the Electra Battery. But the stock apears to be less risky and, when comparing its historical volatility, Northstar Clean Technologies is 1.6 times less risky than Electra Battery. The stock trades about -0.09 of its potential returns per unit of risk. The Electra Battery Materials is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 242.00 in Electra Battery Materials on December 11, 2024 and sell it today you would lose (36.00) from holding Electra Battery Materials or give up 14.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northstar Clean Technologies vs. Electra Battery Materials
Performance |
| Timeline |
| Northstar Clean Tech |
| Electra Battery Materials |
Northstar Clean and Electra Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and Electra Battery
The main advantage of trading using opposite Northstar Clean and Electra Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean 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.The idea behind Northstar Clean Technologies and Electra Battery Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |