Correlation Between Green Technology and Surge Battery
Can any of the company-specific risk be diversified away by investing in both Green Technology and Surge 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 Green Technology and Surge Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Technology Metals and Surge Battery Metals, you can compare the effects of market volatilities on Green Technology and Surge 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 Green Technology with a short position of Surge Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Technology and Surge Battery.
Diversification Opportunities for Green Technology and Surge Battery
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Green and Surge is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Green Technology Metals and Surge Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Battery Metals and Green Technology 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 Green Technology Metals are associated (or correlated) with Surge Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Battery Metals has no effect on the direction of Green Technology i.e., Green Technology and Surge Battery go up and down completely randomly.
Pair Corralation between Green Technology and Surge Battery
Assuming the 90 days horizon Green Technology Metals is expected to generate 2.38 times more return on investment than Surge Battery. However, Green Technology is 2.38 times more volatile than Surge Battery Metals. It trades about 0.02 of its potential returns per unit of risk. Surge Battery Metals is currently generating about 0.03 per unit of risk. If you would invest 57.00 in Green Technology Metals on September 17, 2024 and sell it today you would lose (52.50) from holding Green Technology Metals or give up 92.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Green Technology Metals vs. Surge Battery Metals
Performance |
Timeline |
Green Technology Metals |
Surge Battery Metals |
Green Technology and Surge Battery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Green Technology and Surge Battery
The main advantage of trading using opposite Green Technology and Surge Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Technology position performs unexpectedly, Surge 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 Surge Battery will offset losses from the drop in Surge Battery's long position.Green Technology vs. Lake Resources NL | Green Technology vs. Arizona Lithium Limited | Green Technology vs. Sayona Mining Limited | Green Technology vs. Argosy Minerals Limited |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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