Correlation Between CBAK Energy and Chardan NexTech
Can any of the company-specific risk be diversified away by investing in both CBAK Energy and Chardan NexTech 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 Chardan NexTech 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 Chardan NexTech Acquisition, you can compare the effects of market volatilities on CBAK Energy and Chardan NexTech 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 Chardan NexTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBAK Energy and Chardan NexTech.
Diversification Opportunities for CBAK Energy and Chardan NexTech
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CBAK and Chardan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CBAK Energy Technology and Chardan NexTech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chardan NexTech Acqu 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 Chardan NexTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chardan NexTech Acqu has no effect on the direction of CBAK Energy i.e., CBAK Energy and Chardan NexTech go up and down completely randomly.
Pair Corralation between CBAK Energy and Chardan NexTech
Given the investment horizon of 90 days CBAK Energy Technology is expected to generate 0.54 times more return on investment than Chardan NexTech. However, CBAK Energy Technology is 1.86 times less risky than Chardan NexTech. It trades about 0.01 of its potential returns per unit of risk. Chardan NexTech Acquisition is currently generating about -0.04 per unit of risk. If you would invest 119.00 in CBAK Energy Technology on August 28, 2024 and sell it today you would lose (29.00) from holding CBAK Energy Technology or give up 24.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBAK Energy Technology vs. Chardan NexTech Acquisition
Performance |
| Timeline |
| CBAK Energy Technology |
| Chardan NexTech Acqu |
CBAK Energy and Chardan NexTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBAK Energy and Chardan NexTech
The main advantage of trading using opposite CBAK Energy and Chardan NexTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBAK Energy position performs unexpectedly, Chardan NexTech 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 Chardan NexTech will offset losses from the drop in Chardan NexTech's long position.| CBAK Energy vs. Bloom Energy Corp | CBAK Energy vs. Eos Energy Enterprises | CBAK Energy vs. Sunrise New Energy | CBAK Energy vs. GrafTech International |
| Chardan NexTech vs. Polar Power | Chardan NexTech vs. Eos Energy Enterprises | Chardan NexTech vs. Sunrise New Energy | Chardan NexTech vs. AFC Energy plc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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