Correlation Between Electrovaya Common and STARBUCKS

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

Diversification Opportunities for Electrovaya Common and STARBUCKS

0.2

Correlation Coefficient

Electrovaya Common  STARBUCKS

Modest diversification

The 3 months correlation between Electrovaya and STARBUCKS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and STARBUCKS PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STARBUCKS PORATION 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 STARBUCKS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STARBUCKS PORATION has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and STARBUCKS go up and down completely randomly.

Pair Corralation between Electrovaya Common and STARBUCKS

Given the investment horizon of 90 days Electrovaya Common Shares is expected to under-perform the STARBUCKS. In addition to that, Electrovaya Common is 6.7 times more volatile than STARBUCKS PORATION. It trades about -0.07 of its total potential returns per unit of risk. STARBUCKS PORATION is currently generating about -0.12 per unit of volatility. If you would invest  8,885  in STARBUCKS PORATION on December 2, 2024 and sell it today you would lose (415.00) from holding STARBUCKS PORATION or give up 4.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Electrovaya Common Shares  vs.  STARBUCKS PORATION

Electrovaya Common Shares

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electrovaya Common Shares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

STARBUCKS PORATION

Risk-Adjusted Performance

Very Weak

Over the last 90 days STARBUCKS PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, STARBUCKS is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Electrovaya Common and STARBUCKS

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

The idea behind Electrovaya Common Shares and STARBUCKS PORATION 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..