Correlation Between Altus Power and Energy Vault
Can any of the company-specific risk be diversified away by investing in both Altus Power and Energy Vault 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 Altus Power and Energy Vault into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altus Power and Energy Vault Holdings, you can compare the effects of market volatilities on Altus Power and Energy Vault 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 Altus Power with a short position of Energy Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Power and Energy Vault.
Diversification Opportunities for Altus Power and Energy Vault
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Altus and Energy is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Altus Power and Energy Vault Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Vault Holdings and Altus Power 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 Altus Power are associated (or correlated) with Energy Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Vault Holdings has no effect on the direction of Altus Power i.e., Altus Power and Energy Vault go up and down completely randomly.
Pair Corralation between Altus Power and Energy Vault
Given the investment horizon of 90 days Altus Power is expected to generate 0.78 times more return on investment than Energy Vault. However, Altus Power is 1.28 times less risky than Energy Vault. It trades about 0.11 of its potential returns per unit of risk. Energy Vault Holdings is currently generating about 0.07 per unit of risk. If you would invest 377.00 in Altus Power on August 28, 2024 and sell it today you would earn a total of 51.00 from holding Altus Power or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altus Power vs. Energy Vault Holdings
Performance |
| Timeline |
| Altus Power |
| Energy Vault Holdings |
Altus Power and Energy Vault Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altus Power and Energy Vault
The main advantage of trading using opposite Altus Power and Energy Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Power position performs unexpectedly, Energy Vault 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 Energy Vault will offset losses from the drop in Energy Vault's long position.| Altus Power vs. Ormat Technologies | Altus Power vs. Enlight Renewable Energy | Altus Power vs. Fluence Energy | Altus Power vs. Renew Energy Global |
| Energy Vault vs. Renew Energy Global | Energy Vault vs. Fluence Energy | Energy Vault vs. Enlight Renewable Energy | Energy Vault vs. Advent Technologies Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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