Correlation Between AFC Energy and NeoVolta Common
Can any of the company-specific risk be diversified away by investing in both AFC Energy and NeoVolta Common 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 AFC Energy and NeoVolta Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFC Energy plc and NeoVolta Common Stock, you can compare the effects of market volatilities on AFC Energy and NeoVolta Common 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 AFC Energy with a short position of NeoVolta Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFC Energy and NeoVolta Common.
Diversification Opportunities for AFC Energy and NeoVolta Common
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AFC and NeoVolta is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding AFC Energy plc and NeoVolta Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoVolta Common Stock and AFC Energy 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 AFC Energy plc are associated (or correlated) with NeoVolta Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoVolta Common Stock has no effect on the direction of AFC Energy i.e., AFC Energy and NeoVolta Common go up and down completely randomly.
Pair Corralation between AFC Energy and NeoVolta Common
Assuming the 90 days horizon AFC Energy plc is expected to under-perform the NeoVolta Common. But the pink sheet apears to be less risky and, when comparing its historical volatility, AFC Energy plc is 1.15 times less risky than NeoVolta Common. The pink sheet trades about 0.0 of its potential returns per unit of risk. The NeoVolta Common Stock is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 292.00 in NeoVolta Common Stock on August 29, 2024 and sell it today you would earn a total of 251.00 from holding NeoVolta Common Stock or generate 85.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AFC Energy plc vs. NeoVolta Common Stock
Performance |
| Timeline |
| AFC Energy plc |
| NeoVolta Common Stock |
AFC Energy and NeoVolta Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFC Energy and NeoVolta Common
The main advantage of trading using opposite AFC Energy and NeoVolta Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFC Energy position performs unexpectedly, NeoVolta Common 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 NeoVolta Common will offset losses from the drop in NeoVolta Common's long position.| AFC Energy vs. Legrand SA ADR | AFC Energy vs. Loop Energy | AFC Energy vs. Sunrise New Energy | AFC Energy vs. Alfen NV |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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