Correlation Between Beyond Minerals and Elcora Advanced

Can any of the company-specific risk be diversified away by investing in both Beyond Minerals and Elcora Advanced 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 Beyond Minerals and Elcora Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Beyond Minerals and Elcora Advanced Materials, you can compare the effects of market volatilities on Beyond Minerals and Elcora Advanced 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 Beyond Minerals with a short position of Elcora Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Minerals and Elcora Advanced.

Diversification Opportunities for Beyond Minerals and Elcora Advanced

-0.04

Correlation Coefficient

Beyond Minerals  Elcora Advanced

Good diversification

The 3 months correlation between Beyond and Elcora is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Minerals and Elcora Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcora Advanced Materials and Beyond Minerals 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 Beyond Minerals are associated (or correlated) with Elcora Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcora Advanced Materials has no effect on the direction of Beyond Minerals i.e., Beyond Minerals and Elcora Advanced go up and down completely randomly.

Pair Corralation between Beyond Minerals and Elcora Advanced

Assuming the 90 days horizon Beyond Minerals is expected to generate 1.6 times more return on investment than Elcora Advanced. However, Beyond Minerals is 1.6 times more volatile than Elcora Advanced Materials. It trades about 0.03 of its potential returns per unit of risk. Elcora Advanced Materials is currently generating about 0.01 per unit of risk. If you would invest  4.42  in Beyond Minerals on September 1, 2024 and sell it today you would lose (1.65) from holding Beyond Minerals or give up 37.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Beyond Minerals  vs.  Elcora Advanced Materials

Beyond Minerals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Minerals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain primary indicators, Beyond Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Elcora Advanced Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elcora Advanced Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Elcora Advanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Beyond Minerals and Elcora Advanced

The main advantage of trading using opposite Beyond Minerals and Elcora Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Minerals position performs unexpectedly, Elcora Advanced 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 Elcora Advanced will offset losses from the drop in Elcora Advanced's long position.

The idea behind Beyond Minerals and Elcora Advanced 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.

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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.