Correlation Between Patriot Battery and Nobel Resources

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

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

Diversification Opportunities for Patriot Battery and Nobel Resources

0.31

Correlation Coefficient

Patriot Battery  Nobel Resources

Weak diversification

The 3 months correlation between Patriot and Nobel is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Patriot Battery Metals and Nobel Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nobel Resources Corp and Patriot Battery 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 Patriot Battery Metals are associated (or correlated) with Nobel Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nobel Resources Corp has no effect on the direction of Patriot Battery i.e., Patriot Battery and Nobel Resources go up and down completely randomly.

Pair Corralation between Patriot Battery and Nobel Resources

Assuming the 90 days horizon Patriot Battery Metals is expected to generate 1.0 times more return on investment than Nobel Resources. However, Patriot Battery is 1.0 times more volatile than Nobel Resources Corp. It trades about -0.05 of its potential returns per unit of risk. Nobel Resources Corp is currently generating about -0.06 per unit of risk. If you would invest  259.00  in Patriot Battery Metals on September 11, 2024 and sell it today you would lose (60.00) from holding Patriot Battery Metals or give up 23.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Patriot Battery Metals  vs.  Nobel Resources Corp

Patriot Battery Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Patriot Battery Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Nobel Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nobel Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Patriot Battery and Nobel Resources

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

The idea behind Patriot Battery Metals and Nobel Resources Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.