Correlation Between Acuity Brands and NeoVolta Common
Can any of the company-specific risk be diversified away by investing in both Acuity Brands 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 Acuity Brands and NeoVolta Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acuity Brands and NeoVolta Common Stock, you can compare the effects of market volatilities on Acuity Brands 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 Acuity Brands with a short position of NeoVolta Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acuity Brands and NeoVolta Common.
Diversification Opportunities for Acuity Brands and NeoVolta Common
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Acuity and NeoVolta is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Acuity Brands 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 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 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 Acuity Brands i.e., Acuity Brands and NeoVolta Common go up and down completely randomly.
Pair Corralation between Acuity Brands and NeoVolta Common
Considering the 90-day investment horizon Acuity Brands is expected to generate 8.24 times less return on investment than NeoVolta Common. But when comparing it to its historical volatility, Acuity Brands is 4.43 times less risky than NeoVolta Common. It trades about 0.3 of its potential returns per unit of risk. NeoVolta Common Stock is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 308.00 in NeoVolta Common Stock on August 27, 2024 and sell it today you would earn a total of 249.00 from holding NeoVolta Common Stock or generate 80.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acuity Brands vs. NeoVolta Common Stock
Performance |
| Timeline |
| Acuity Brands |
| NeoVolta Common Stock |
Acuity Brands and NeoVolta Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acuity Brands and NeoVolta Common
The main advantage of trading using opposite Acuity Brands and NeoVolta Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acuity Brands 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.| Acuity Brands vs. Bloom Energy Corp | Acuity Brands vs. Eos Energy Enterprises | Acuity Brands vs. Sunrise New Energy | Acuity Brands vs. Flux Power Holdings |
| NeoVolta Common vs. FREYR Battery SA | NeoVolta Common vs. Microvast Holdings | NeoVolta Common vs. Chardan NexTech Acquisition | NeoVolta Common vs. Solid 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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