Correlation Between Westshore Terminals and Electra Battery
Can any of the company-specific risk be diversified away by investing in both Westshore Terminals 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 Westshore Terminals and Electra Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westshore Terminals Investment and Electra Battery Materials, you can compare the effects of market volatilities on Westshore Terminals 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 Westshore Terminals with a short position of Electra Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westshore Terminals and Electra Battery.
Diversification Opportunities for Westshore Terminals and Electra Battery
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westshore and Electra is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Westshore Terminals Investment 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 Westshore Terminals 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 Westshore Terminals Investment 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 Westshore Terminals i.e., Westshore Terminals and Electra Battery go up and down completely randomly.
Pair Corralation between Westshore Terminals and Electra Battery
Assuming the 90 days trading horizon Westshore Terminals Investment is expected to generate 0.3 times more return on investment than Electra Battery. However, Westshore Terminals Investment is 3.29 times less risky than Electra Battery. It trades about -0.18 of its potential returns per unit of risk. Electra Battery Materials is currently generating about -0.34 per unit of risk. If you would invest 2,401 in Westshore Terminals Investment on September 26, 2024 and sell it today you would lose (94.00) from holding Westshore Terminals Investment or give up 3.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Westshore Terminals Investment vs. Electra Battery Materials
Performance |
Timeline |
Westshore Terminals |
Electra Battery Materials |
Westshore Terminals and Electra Battery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Westshore Terminals and Electra Battery
The main advantage of trading using opposite Westshore Terminals and Electra Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westshore Terminals 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.Westshore Terminals vs. Goodfellow | Westshore Terminals vs. Leons Furniture Limited | Westshore Terminals vs. High Liner Foods | Westshore Terminals vs. Exco Technologies Limited |
Electra Battery vs. Monarca Minerals | Electra Battery vs. Outcrop Gold Corp | Electra Battery vs. Grande Portage Resources | Electra Battery vs. Klondike Silver Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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