Correlation Between Electrovaya Common and TARGET

Can any of the company-specific risk be diversified away by investing in both Electrovaya Common and TARGET 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 TARGET 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 TARGET P 7, you can compare the effects of market volatilities on Electrovaya Common and TARGET 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 TARGET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and TARGET.

Diversification Opportunities for Electrovaya Common and TARGET

0.41

Correlation Coefficient

Electrovaya Common  TARGET

Very weak diversification

The 3 months correlation between Electrovaya and TARGET is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and TARGET P 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TARGET P 7 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 TARGET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TARGET P 7 has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and TARGET go up and down completely randomly.

Pair Corralation between Electrovaya Common and TARGET

Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 3.07 times more return on investment than TARGET. However, Electrovaya Common is 3.07 times more volatile than TARGET P 7. It trades about 0.07 of its potential returns per unit of risk. TARGET P 7 is currently generating about 0.08 per unit of risk. If you would invest  242.00  in Electrovaya Common Shares on December 25, 2024 and sell it today you would earn a total of  29.00  from holding Electrovaya Common Shares or generate 11.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	30.51%
Values	Daily Returns

Electrovaya Common Shares  vs.  TARGET P 7

Electrovaya Common Shares

Risk-Adjusted Performance

OK

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 unfluctuating basic indicators, Electrovaya Common sustained solid returns over the last few months and may actually be approaching a breakup point.

TARGET P 7

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TARGET P 7 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, TARGET is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Electrovaya Common and TARGET

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

The idea behind Electrovaya Common Shares and TARGET P 7 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 Transaction History module to view history of all your transactions and understand their impact on performance.