Correlation Between Sienna Resources and International Battery
Can any of the company-specific risk be diversified away by investing in both Sienna Resources and International 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 Sienna Resources and International Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sienna Resources and International Battery Metals, you can compare the effects of market volatilities on Sienna Resources and International 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 Sienna Resources with a short position of International Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sienna Resources and International Battery.
Diversification Opportunities for Sienna Resources and International Battery
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sienna and International is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sienna Resources and International Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Battery and Sienna Resources 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 Sienna Resources are associated (or correlated) with International Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Battery has no effect on the direction of Sienna Resources i.e., Sienna Resources and International Battery go up and down completely randomly.
Pair Corralation between Sienna Resources and International Battery
Assuming the 90 days horizon Sienna Resources is expected to generate 1.22 times more return on investment than International Battery. However, Sienna Resources is 1.22 times more volatile than International Battery Metals. It trades about 0.03 of its potential returns per unit of risk. International Battery Metals is currently generating about -0.04 per unit of risk. If you would invest 3.18 in Sienna Resources on September 3, 2024 and sell it today you would lose (1.18) from holding Sienna Resources or give up 37.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sienna Resources vs. International Battery Metals
Performance |
| Timeline |
| Sienna Resources |
| International Battery |
Sienna Resources and International Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sienna Resources and International Battery
The main advantage of trading using opposite Sienna Resources and International Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sienna Resources position performs unexpectedly, International 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 International Battery will offset losses from the drop in International Battery's long position.| Sienna Resources vs. Norra Metals Corp | Sienna Resources vs. E79 Resources Corp | Sienna Resources vs. Voltage Metals Corp | Sienna Resources vs. Cantex Mine Development |
| International Battery vs. Savannah Resources Plc | International Battery vs. Tartisan Nickel Corp | International Battery vs. Critical Elements | International Battery vs. Lithium Energi Exploration |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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