Correlation Between Acuity Brands and Microvast Holdings
Can any of the company-specific risk be diversified away by investing in both Acuity Brands and Microvast Holdings 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 Acuity Brands and Microvast Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acuity Brands and Microvast Holdings, you can compare the effects of market volatilities on Acuity Brands and Microvast Holdings 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 Acuity Brands with a short position of Microvast Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acuity Brands and Microvast Holdings.
Diversification Opportunities for Acuity Brands and Microvast Holdings
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Acuity and Microvast is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Acuity Brands and Microvast Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microvast Holdings and Acuity Brands 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 Acuity Brands are associated (or correlated) with Microvast Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microvast Holdings has no effect on the direction of Acuity Brands i.e., Acuity Brands and Microvast Holdings go up and down completely randomly.
Pair Corralation between Acuity Brands and Microvast Holdings
Considering the 90-day investment horizon Acuity Brands is expected to generate 42.59 times less return on investment than Microvast Holdings. But when comparing it to its historical volatility, Acuity Brands is 61.37 times less risky than Microvast Holdings. It trades about 0.3 of its potential returns per unit of risk. Microvast Holdings is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Microvast Holdings on August 28, 2024 and sell it today you would earn a total of 52.00 from holding Microvast Holdings or generate 247.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acuity Brands vs. Microvast Holdings
Performance |
| Timeline |
| Acuity Brands |
| Microvast Holdings |
Acuity Brands and Microvast Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acuity Brands and Microvast Holdings
The main advantage of trading using opposite Acuity Brands and Microvast Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acuity Brands position performs unexpectedly, Microvast Holdings 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 Microvast Holdings will offset losses from the drop in Microvast Holdings' long position.| Acuity Brands vs. Bloom Energy Corp | Acuity Brands vs. Eos Energy Enterprises | Acuity Brands vs. Sunrise New Energy | Acuity Brands vs. GrafTech International |
| Microvast Holdings vs. FREYR Battery SA | Microvast Holdings vs. Bloom Energy Corp | Microvast Holdings vs. Enovix Corp | Microvast Holdings vs. Plug Power |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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