Correlation Between Nova Minerals and American Battery
Can any of the company-specific risk be diversified away by investing in both Nova Minerals and American 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 Nova Minerals and American Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova Minerals Limited and American Battery Metals, you can compare the effects of market volatilities on Nova Minerals and American 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 Nova Minerals with a short position of American Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Minerals and American Battery.
Diversification Opportunities for Nova Minerals and American Battery
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nova and American is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nova Minerals Limited and American Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Battery Metals and Nova Minerals 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 Nova Minerals Limited are associated (or correlated) with American Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Battery Metals has no effect on the direction of Nova Minerals i.e., Nova Minerals and American Battery go up and down completely randomly.
Pair Corralation between Nova Minerals and American Battery
If you would invest 21.00 in Nova Minerals Limited on September 12, 2024 and sell it today you would lose (1.00) from holding Nova Minerals Limited or give up 4.76% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 0.81% |
Values | Daily Returns |
Nova Minerals Limited vs. American Battery Metals
Performance |
Timeline |
Nova Minerals Limited |
American Battery Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nova Minerals and American Battery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nova Minerals and American Battery
The main advantage of trading using opposite Nova Minerals and American Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Minerals position performs unexpectedly, American 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 American Battery will offset losses from the drop in American Battery's long position.Nova Minerals vs. Qubec Nickel Corp | Nova Minerals vs. IGO Limited | Nova Minerals vs. Focus Graphite | Nova Minerals vs. Mineral Res |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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