Correlation Between Outcrop Gold and Electra Battery
Can any of the company-specific risk be diversified away by investing in both Outcrop Gold 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 Outcrop Gold and Electra Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outcrop Gold Corp and Electra Battery Materials, you can compare the effects of market volatilities on Outcrop Gold 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 Outcrop Gold with a short position of Electra Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outcrop Gold and Electra Battery.
Diversification Opportunities for Outcrop Gold and Electra Battery
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Outcrop and Electra is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Outcrop Gold 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 Outcrop Gold 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 Outcrop Gold 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 Outcrop Gold i.e., Outcrop Gold and Electra Battery go up and down completely randomly.
Pair Corralation between Outcrop Gold and Electra Battery
Assuming the 90 days horizon Outcrop Gold is expected to generate 6.15 times less return on investment than Electra Battery. In addition to that, Outcrop Gold is 1.0 times more volatile than Electra Battery Materials. It trades about 0.0 of its total potential returns per unit of risk. Electra Battery Materials is currently generating about 0.01 per unit of volatility. If you would invest 60.00 in Electra Battery Materials on September 25, 2024 and sell it today you would lose (6.00) from holding Electra Battery Materials or give up 10.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Outcrop Gold Corp vs. Electra Battery Materials
Performance |
Timeline |
Outcrop Gold Corp |
Electra Battery Materials |
Outcrop Gold and Electra Battery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Outcrop Gold and Electra Battery
The main advantage of trading using opposite Outcrop Gold and Electra Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outcrop Gold 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.Outcrop Gold vs. Strikepoint Gold | Outcrop Gold vs. Kootenay Silver | Outcrop Gold vs. Kore Mining | Outcrop Gold vs. Blackrock Silver Corp |
Electra Battery vs. Frontier Lithium | Electra Battery vs. Electra Battery Materials | Electra Battery vs. E3 Lithium | Electra Battery vs. Canada Nickel |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |