Correlation Between Partners Value and Ballard Power

Can any of the company-specific risk be diversified away by investing in both Partners Value and Ballard Power 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 Partners Value and Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Partners Value Investments and Ballard Power Systems, you can compare the effects of market volatilities on Partners Value and Ballard Power 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 Partners Value with a short position of Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partners Value and Ballard Power.

Diversification Opportunities for Partners Value and Ballard Power

-0.27

Correlation Coefficient

Partners Value  Ballard Power

Very good diversification

The 3 months correlation between Partners and Ballard is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Partners Value Investments and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Partners Value 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 Partners Value Investments are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Partners Value i.e., Partners Value and Ballard Power go up and down completely randomly.

Pair Corralation between Partners Value and Ballard Power

Assuming the 90 days trading horizon Partners Value Investments is expected to generate 0.81 times more return on investment than Ballard Power. However, Partners Value Investments is 1.24 times less risky than Ballard Power. It trades about 0.24 of its potential returns per unit of risk. Ballard Power Systems is currently generating about 0.02 per unit of risk. If you would invest  9,600  in Partners Value Investments on September 12, 2024 and sell it today you would earn a total of  6,650  from holding Partners Value Investments or generate 69.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Partners Value Investments  vs.  Ballard Power Systems

Partners Value Inves

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Partners Value Investments are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Partners Value sustained solid returns over the last few months and may actually be approaching a breakup point.

Ballard Power Systems

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ballard Power Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Ballard Power may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Partners Value and Ballard Power

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

The idea behind Partners Value Investments and Ballard Power Systems 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.