Correlation Between Kutcho Copper and Electra Battery

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

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

Diversification Opportunities for Kutcho Copper and Electra Battery

0.0

Correlation Coefficient

Kutcho Copper  Electra Battery

Pay attention - limited upside

The 3 months correlation between Kutcho and Electra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kutcho Copper Corp and Electra Battery Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra Battery Materials and Kutcho Copper 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 Kutcho Copper Corp are associated (or correlated) with Electra Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra Battery Materials has no effect on the direction of Kutcho Copper i.e., Kutcho Copper and Electra Battery go up and down completely randomly.

Pair Corralation between Kutcho Copper and Electra Battery

If you would invest  54.00  in Electra Battery Materials on October 23, 2024 and sell it today you would earn a total of  166.00  from holding Electra Battery Materials or generate 307.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Kutcho Copper Corp  vs.  Electra Battery Materials

Kutcho Copper Corp

Risk-Adjusted Performance

0 of 100

Insignificant

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

Electra Battery Materials

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Electra Battery Materials are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental drivers, Electra Battery showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kutcho Copper and Electra Battery

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

The idea behind Kutcho Copper Corp and Electra 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 Global Correlations module to find global opportunities by holding instruments from different markets.