Correlation Between Global Battery and Highland Surprise

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

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

Diversification Opportunities for Global Battery and Highland Surprise

0.0

Correlation Coefficient

Global Battery  Highland Surprise

Pay attention - limited upside

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

Pair Corralation between Global Battery and Highland Surprise

If you would invest  1.52  in Global Battery Metals on September 30, 2024 and sell it today you would earn a total of  0.05  from holding Global Battery Metals or generate 3.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Global Battery Metals  vs.  Highland Surprise Consolidated

Global Battery Metals

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Battery Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Global Battery reported solid returns over the last few months and may actually be approaching a breakup point.

Highland Surprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highland Surprise Consolidated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Highland Surprise is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Global Battery and Highland Surprise

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

The idea behind Global Battery Metals and Highland Surprise Consolidated 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.