Correlation Between International Zeolite and Neo Battery

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

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

Diversification Opportunities for International Zeolite and Neo Battery

-0.13

Correlation Coefficient

International Zeolite  Neo Battery

Good diversification

The 3 months correlation between International and Neo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding International Zeolite Corp and Neo Battery Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Battery Materials and International Zeolite 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 International Zeolite Corp are associated (or correlated) with Neo Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Battery Materials has no effect on the direction of International Zeolite i.e., International Zeolite and Neo Battery go up and down completely randomly.

Pair Corralation between International Zeolite and Neo Battery

Given the investment horizon of 90 days International Zeolite Corp is expected to under-perform the Neo Battery. In addition to that, International Zeolite is 1.16 times more volatile than Neo Battery Materials. It trades about -0.01 of its total potential returns per unit of risk. Neo Battery Materials is currently generating about 0.06 per unit of volatility. If you would invest  30.00  in Neo Battery Materials on December 2, 2024 and sell it today you would earn a total of  38.00  from holding Neo Battery Materials or generate 126.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

International Zeolite Corp  vs.  Neo Battery Materials

International Zeolite

Risk-Adjusted Performance

Very Weak

Over the last 90 days International Zeolite Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Neo Battery Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neo Battery Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Neo Battery is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with International Zeolite and Neo Battery

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

The idea behind International Zeolite Corp and Neo Battery Materials 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 Stocks Directory module to find actively traded stocks across global markets.