Correlation Between Electra Battery and Terrace Ventures

Can any of the company-specific risk be diversified away by investing in both Electra Battery and Terrace Ventures 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 Electra Battery and Terrace Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Electra Battery and Terrace Ventures

0.41

Correlation Coefficient

Electra Battery  Terrace Ventures

Very weak diversification

The 3 months correlation between Electra and Terrace is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials and Terrace Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terrace Ventures and Electra 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 Electra Battery Materials are associated (or correlated) with Terrace Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terrace Ventures has no effect on the direction of Electra Battery i.e., Electra Battery and Terrace Ventures go up and down completely randomly.

Pair Corralation between Electra Battery and Terrace Ventures

If you would invest  0.01  in Terrace Ventures on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Terrace Ventures or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.02%
Values	Daily Returns

Electra Battery Materials  vs.  Terrace Ventures

Electra Battery Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electra Battery Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Terrace Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Terrace Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Electra Battery and Terrace Ventures

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

The idea behind Electra Battery Materials and Terrace Ventures 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.