Correlation Between Novonix and PAMT P

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

By analyzing existing cross correlation between Novonix Ltd ADR and PAMT P, you can compare the effects of market volatilities on Novonix and PAMT P 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 Novonix with a short position of PAMT P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novonix and PAMT P.

Diversification Opportunities for Novonix and PAMT P

0.33

Correlation Coefficient

Novonix  PAMT P

Weak diversification

The 3 months correlation between Novonix and PAMT is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Novonix Ltd ADR and PAMT P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAMT P and Novonix 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 Novonix Ltd ADR are associated (or correlated) with PAMT P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAMT P has no effect on the direction of Novonix i.e., Novonix and PAMT P go up and down completely randomly.

Pair Corralation between Novonix and PAMT P

Considering the 90-day investment horizon Novonix is expected to generate 12.57 times less return on investment than PAMT P. In addition to that, Novonix is 1.09 times more volatile than PAMT P. It trades about 0.03 of its total potential returns per unit of risk. PAMT P is currently generating about 0.41 per unit of volatility. If you would invest  891.00  in PAMT P on September 24, 2025 and sell it today you would earn a total of  281.00  from holding PAMT P or generate 31.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Novonix Ltd ADR  vs.  PAMT P

Novonix Ltd ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Novonix Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Novonix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PAMT P

Risk-Adjusted Performance

Weakest

Over the last 90 days PAMT P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, PAMT P is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Novonix and PAMT P

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

The idea behind Novonix Ltd ADR and PAMT P 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.