Correlation Between Patriot Battery and Timbercreek Financial

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

Diversification Opportunities for Patriot Battery and Timbercreek Financial

0.68

Correlation Coefficient

Patriot Battery  Timbercreek Financial

Poor diversification

The 3 months correlation between Patriot and Timbercreek is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Patriot Battery Metals and Timbercreek Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timbercreek Financial 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 Timbercreek Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timbercreek Financial has no effect on the direction of Patriot Battery i.e., Patriot Battery and Timbercreek Financial go up and down completely randomly.

Pair Corralation between Patriot Battery and Timbercreek Financial

Assuming the 90 days trading horizon Patriot Battery Metals is expected to generate 8.27 times more return on investment than Timbercreek Financial. However, Patriot Battery is 8.27 times more volatile than Timbercreek Financial Corp. It trades about 0.17 of its potential returns per unit of risk. Timbercreek Financial Corp is currently generating about 0.25 per unit of risk. If you would invest  222.00  in Patriot Battery Metals on May 6, 2025 and sell it today you would earn a total of  149.00  from holding Patriot Battery Metals or generate 67.12% return on investment over 90 days.

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

Patriot Battery Metals  vs.  Timbercreek Financial Corp

Patriot Battery Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Patriot Battery Metals are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Patriot Battery displayed solid returns over the last few months and may actually be approaching a breakup point.

Timbercreek Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Timbercreek Financial Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Timbercreek Financial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Patriot Battery and Timbercreek Financial

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

The idea behind Patriot Battery Metals and Timbercreek Financial Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.