Correlation Between Ads Tec and Solid Power
Can any of the company-specific risk be diversified away by investing in both Ads Tec and Solid 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 Ads Tec and Solid Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ads Tec Energy and Solid Power, you can compare the effects of market volatilities on Ads Tec and Solid 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 Ads Tec with a short position of Solid Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ads Tec and Solid Power.
Diversification Opportunities for Ads Tec and Solid Power
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ads and Solid is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ads Tec Energy and Solid Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Power and Ads Tec 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 Ads Tec Energy are associated (or correlated) with Solid Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Power has no effect on the direction of Ads Tec i.e., Ads Tec and Solid Power go up and down completely randomly.
Pair Corralation between Ads Tec and Solid Power
Given the investment horizon of 90 days Ads Tec Energy is expected to under-perform the Solid Power. But the stock apears to be less risky and, when comparing its historical volatility, Ads Tec Energy is 2.16 times less risky than Solid Power. The stock trades about -0.04 of its potential returns per unit of risk. The Solid Power is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 118.00 in Solid Power on September 1, 2024 and sell it today you would lose (2.00) from holding Solid Power or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ads Tec Energy vs. Solid Power
Performance |
| Timeline |
| Ads Tec Energy |
| Solid Power |
Ads Tec and Solid Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ads Tec and Solid Power
The main advantage of trading using opposite Ads Tec and Solid Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ads Tec position performs unexpectedly, Solid 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 Solid Power will offset losses from the drop in Solid Power's long position.| Ads Tec vs. Espey Mfg Electronics | Ads Tec vs. NeoVolta Warrant | Ads Tec vs. Kimball Electronics | Ads Tec vs. Hayward Holdings |
| Solid Power vs. Plug Power | Solid Power vs. FREYR Battery SA | Solid Power vs. FuelCell Energy | Solid Power vs. Enovix Corp |
Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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