Correlation Between CVW CleanTech and Electra Battery

Can any of the company-specific risk be diversified away by investing in both CVW CleanTech and Electra 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 CVW CleanTech and Electra Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CVW CleanTech and Electra Battery Materials, you can compare the effects of market volatilities on CVW CleanTech and Electra 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 CVW CleanTech with a short position of Electra Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and Electra Battery.

Diversification Opportunities for CVW CleanTech and Electra Battery

-0.03

Correlation Coefficient

CVW CleanTech  Electra Battery

Good diversification

The 3 months correlation between CVW and Electra is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and Electra Battery Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra Battery Materials and CVW CleanTech 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 CVW CleanTech are associated (or correlated) with Electra Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra Battery Materials has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and Electra Battery go up and down completely randomly.

Pair Corralation between CVW CleanTech and Electra Battery

Assuming the 90 days horizon CVW CleanTech is expected to generate 0.92 times more return on investment than Electra Battery. However, CVW CleanTech is 1.08 times less risky than Electra Battery. It trades about 0.1 of its potential returns per unit of risk. Electra Battery Materials is currently generating about 0.08 per unit of risk. If you would invest  90.00  in CVW CleanTech on April 25, 2025 and sell it today you would earn a total of  14.00  from holding CVW CleanTech or generate 15.56% return on investment over 90 days.

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

CVW CleanTech  vs.  Electra Battery Materials

CVW CleanTech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CVW CleanTech are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CVW CleanTech showed solid returns over the last few months and may actually be approaching a breakup point.

Electra Battery Materials

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Electra Battery Materials are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental drivers, Electra Battery showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVW CleanTech and Electra Battery

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

The idea behind CVW CleanTech and Electra Battery Materials 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.