Correlation Between Electrovaya Common and Ace Global

Can any of the company-specific risk be diversified away by investing in both Electrovaya Common and Ace Global 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 Electrovaya Common and Ace Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Electrovaya Common Shares and Ace Global Business, you can compare the effects of market volatilities on Electrovaya Common and Ace Global 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 Electrovaya Common with a short position of Ace Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and Ace Global.

Diversification Opportunities for Electrovaya Common and Ace Global

-0.89

Correlation Coefficient

Electrovaya Common  Ace Global

Pay attention - limited upside

The 3 months correlation between Electrovaya and Ace is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and Ace Global Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Global Business and Electrovaya Common 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 Electrovaya Common Shares are associated (or correlated) with Ace Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Global Business has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and Ace Global go up and down completely randomly.

Pair Corralation between Electrovaya Common and Ace Global

Given the investment horizon of 90 days Electrovaya Common Shares is expected to under-perform the Ace Global. In addition to that, Electrovaya Common is 5.49 times more volatile than Ace Global Business. It trades about -0.14 of its total potential returns per unit of risk. Ace Global Business is currently generating about 0.11 per unit of volatility. If you would invest  1,198  in Ace Global Business on February 18, 2024 and sell it today you would earn a total of  25.00  from holding Ace Global Business or generate 2.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	52.38%
Values	Daily Returns

Electrovaya Common Shares  vs.  Ace Global Business

Electrovaya Common Shares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Electrovaya Common Shares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Ace Global Business

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ace Global Business are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Ace Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Electrovaya Common and Ace Global

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

The idea behind Electrovaya Common Shares and Ace Global Business 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.