Correlation Between CBAK Energy and Enovix Corp
Can any of the company-specific risk be diversified away by investing in both CBAK Energy and Enovix Corp 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 Enovix Corp 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 Enovix Corp, you can compare the effects of market volatilities on CBAK Energy and Enovix Corp 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 Enovix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBAK Energy and Enovix Corp.
Diversification Opportunities for CBAK Energy and Enovix Corp
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CBAK and Enovix is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CBAK Energy Technology and Enovix Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enovix Corp 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 Enovix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enovix Corp has no effect on the direction of CBAK Energy i.e., CBAK Energy and Enovix Corp go up and down completely randomly.
Pair Corralation between CBAK Energy and Enovix Corp
Given the investment horizon of 90 days CBAK Energy is expected to generate 5.03 times less return on investment than Enovix Corp. But when comparing it to its historical volatility, CBAK Energy Technology is 1.43 times less risky than Enovix Corp. It trades about 0.01 of its potential returns per unit of risk. Enovix Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,223 in Enovix Corp on August 24, 2024 and sell it today you would lose (280.00) from holding Enovix Corp or give up 22.89% 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. Enovix Corp
Performance |
| Timeline |
| CBAK Energy Technology |
| Enovix Corp |
CBAK Energy and Enovix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBAK Energy and Enovix Corp
The main advantage of trading using opposite CBAK Energy and Enovix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBAK Energy position performs unexpectedly, Enovix Corp 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 Enovix Corp will offset losses from the drop in Enovix Corp's long position.| CBAK Energy vs. Pioneer Power Solutions | CBAK Energy vs. Ocean Power Technologies | CBAK Energy vs. Ideal Power | CBAK Energy vs. Expion360 |
| Enovix Corp vs. ESS Tech | Enovix Corp vs. FREYR Battery SA | Enovix Corp vs. Microvast Holdings | Enovix Corp vs. Eos Energy Enterprises |
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 Positions Ratings module to 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.
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