Correlation Between Electrovaya Common and Royalty Management

Can any of the company-specific risk be diversified away by investing in both Electrovaya Common and Royalty Management 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 Electrovaya Common and Royalty Management into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Electrovaya Common Shares and Royalty Management Holding, you can compare the effects of market volatilities on Electrovaya Common and Royalty Management 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 Electrovaya Common with a short position of Royalty Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and Royalty Management.

Diversification Opportunities for Electrovaya Common and Royalty Management

-0.28

Correlation Coefficient

Electrovaya Common  Royalty Management

Very good diversification

The 3 months correlation between Electrovaya and Royalty is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and Royalty Management Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royalty Management and Electrovaya Common 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 Electrovaya Common Shares are associated (or correlated) with Royalty Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royalty Management has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and Royalty Management go up and down completely randomly.

Pair Corralation between Electrovaya Common and Royalty Management

Given the investment horizon of 90 days Electrovaya Common is expected to generate 1.54 times less return on investment than Royalty Management. In addition to that, Electrovaya Common is 1.01 times more volatile than Royalty Management Holding. It trades about 0.03 of its total potential returns per unit of risk. Royalty Management Holding is currently generating about 0.05 per unit of volatility. If you would invest  93.00  in Royalty Management Holding on September 27, 2024 and sell it today you would earn a total of  9.00  from holding Royalty Management Holding or generate 9.68% return on investment over 90 days.

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

Electrovaya Common Shares  vs.  Royalty Management Holding

Electrovaya Common Shares

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Electrovaya Common may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Royalty Management

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Royalty Management Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Royalty Management displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Electrovaya Common and Royalty Management

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

The idea behind Electrovaya Common Shares and Royalty Management Holding 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.