Correlation Between CBAK Energy and Eos Energy
Can any of the company-specific risk be diversified away by investing in both CBAK Energy and Eos 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 Eos 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 Eos Energy Enterprises, you can compare the effects of market volatilities on CBAK Energy and Eos 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 Eos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBAK Energy and Eos Energy.
Diversification Opportunities for CBAK Energy and Eos Energy
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CBAK and Eos is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CBAK Energy Technology and Eos Energy Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eos Energy Enterprises 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 Eos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eos Energy Enterprises has no effect on the direction of CBAK Energy i.e., CBAK Energy and Eos Energy go up and down completely randomly.
Pair Corralation between CBAK Energy and Eos Energy
Given the investment horizon of 90 days CBAK Energy is expected to generate 17.81 times less return on investment than Eos Energy. But when comparing it to its historical volatility, CBAK Energy Technology is 1.79 times less risky than Eos Energy. It trades about 0.01 of its potential returns per unit of risk. Eos Energy Enterprises is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 115.00 in Eos Energy Enterprises on August 24, 2024 and sell it today you would earn a total of 155.00 from holding Eos Energy Enterprises or generate 134.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBAK Energy Technology vs. Eos Energy Enterprises
Performance |
| Timeline |
| CBAK Energy Technology |
| Eos Energy Enterprises |
CBAK Energy and Eos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBAK Energy and Eos Energy
The main advantage of trading using opposite CBAK Energy and Eos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBAK Energy position performs unexpectedly, Eos 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 Eos Energy will offset losses from the drop in Eos 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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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