Correlation Between CBAK Energy and AFC Energy
Can any of the company-specific risk be diversified away by investing in both CBAK Energy and AFC Energy 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 CBAK Energy and AFC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBAK Energy Technology and AFC Energy plc, you can compare the effects of market volatilities on CBAK Energy and AFC Energy 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 CBAK Energy with a short position of AFC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBAK Energy and AFC Energy.
Diversification Opportunities for CBAK Energy and AFC Energy
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between CBAK and AFC is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CBAK Energy Technology and AFC Energy plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Energy plc and CBAK 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 CBAK Energy Technology are associated (or correlated) with AFC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Energy plc has no effect on the direction of CBAK Energy i.e., CBAK Energy and AFC Energy go up and down completely randomly.
Pair Corralation between CBAK Energy and AFC Energy
Given the investment horizon of 90 days CBAK Energy Technology is expected to under-perform the AFC Energy. But the stock apears to be less risky and, when comparing its historical volatility, CBAK Energy Technology is 1.89 times less risky than AFC Energy. The stock trades about -0.19 of its potential returns per unit of risk. The AFC Energy plc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11.00 in AFC Energy plc on August 28, 2024 and sell it today you would earn a total of 2.00 from holding AFC Energy plc or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBAK Energy Technology vs. AFC Energy plc
Performance |
| Timeline |
| CBAK Energy Technology |
| AFC Energy plc |
CBAK Energy and AFC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBAK Energy and AFC Energy
The main advantage of trading using opposite CBAK Energy and AFC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBAK Energy position performs unexpectedly, AFC Energy 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 AFC Energy will offset losses from the drop in AFC Energy's long position.| CBAK Energy vs. Pioneer Power Solutions | CBAK Energy vs. Ocean Power Technologies | CBAK Energy vs. Ideal Power | CBAK Energy vs. Expion360 |
| AFC Energy vs. Legrand SA ADR | AFC Energy vs. Loop Energy | AFC Energy vs. Sunrise New Energy | AFC Energy vs. Alfen NV |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |