Correlation Between Patriot Battery and PM Capital

Can any of the company-specific risk be diversified away by investing in both Patriot Battery and PM Capital 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 PM Capital 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 PM Capital Global, you can compare the effects of market volatilities on Patriot Battery and PM Capital 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 PM Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patriot Battery and PM Capital.

Diversification Opportunities for Patriot Battery and PM Capital

-0.02

Correlation Coefficient

Patriot Battery  PM Capital

Good diversification

The 3 months correlation between Patriot and PGF is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Patriot Battery Metals and PM Capital Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PM Capital Global 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 PM Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PM Capital Global has no effect on the direction of Patriot Battery i.e., Patriot Battery and PM Capital go up and down completely randomly.

Pair Corralation between Patriot Battery and PM Capital

Assuming the 90 days trading horizon Patriot Battery Metals is expected to under-perform the PM Capital. In addition to that, Patriot Battery is 5.11 times more volatile than PM Capital Global. It trades about -0.08 of its total potential returns per unit of risk. PM Capital Global is currently generating about 0.11 per unit of volatility. If you would invest  216.00  in PM Capital Global on September 4, 2024 and sell it today you would earn a total of  14.00  from holding PM Capital Global or generate 6.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Patriot Battery Metals  vs.  PM Capital Global

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. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

PM Capital Global

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PM Capital Global are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, PM Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Patriot Battery and PM Capital

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

The idea behind Patriot Battery Metals and PM Capital Global 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.