Correlation Between Electrovaya Common and Stardust Power

Can any of the company-specific risk be diversified away by investing in both Electrovaya Common and Stardust Power 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 Stardust Power 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 Stardust Power, you can compare the effects of market volatilities on Electrovaya Common and Stardust Power 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 Stardust Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and Stardust Power.

Diversification Opportunities for Electrovaya Common and Stardust Power

-0.43

Correlation Coefficient

Electrovaya Common  Stardust Power

Very good diversification

The 3 months correlation between Electrovaya and Stardust is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and Stardust Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stardust Power 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 Stardust Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stardust Power has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and Stardust Power go up and down completely randomly.

Pair Corralation between Electrovaya Common and Stardust Power

Given the investment horizon of 90 days Electrovaya Common is expected to generate 1.18 times less return on investment than Stardust Power. But when comparing it to its historical volatility, Electrovaya Common Shares is 3.77 times less risky than Stardust Power. It trades about 0.08 of its potential returns per unit of risk. Stardust Power is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  46.00  in Stardust Power on September 13, 2024 and sell it today you would lose (13.00) from holding Stardust Power or give up 28.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.13%
Values	Daily Returns

Electrovaya Common Shares  vs.  Stardust Power

Electrovaya Common Shares

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Electrovaya Common sustained solid returns over the last few months and may actually be approaching a breakup point.

Stardust Power

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stardust Power are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Stardust Power showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Electrovaya Common and Stardust Power

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

The idea behind Electrovaya Common Shares and Stardust Power 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.