Correlation Between CBAK Energy and FREYR Battery
Can any of the company-specific risk be diversified away by investing in both CBAK Energy and FREYR Battery 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 FREYR Battery 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 FREYR Battery SA, you can compare the effects of market volatilities on CBAK Energy and FREYR Battery 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 FREYR Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBAK Energy and FREYR Battery.
Diversification Opportunities for CBAK Energy and FREYR Battery
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CBAK and FREYR is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CBAK Energy Technology and FREYR Battery SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREYR Battery SA 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 FREYR Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREYR Battery SA has no effect on the direction of CBAK Energy i.e., CBAK Energy and FREYR Battery go up and down completely randomly.
Pair Corralation between CBAK Energy and FREYR Battery
Given the investment horizon of 90 days CBAK Energy Technology is expected to generate 0.69 times more return on investment than FREYR Battery. However, CBAK Energy Technology is 1.46 times less risky than FREYR Battery. It trades about 0.03 of its potential returns per unit of risk. FREYR Battery SA is currently generating about 0.02 per unit of risk. If you would invest 94.00 in CBAK Energy Technology on November 3, 2024 and sell it today you would earn a total of 1.00 from holding CBAK Energy Technology or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBAK Energy Technology vs. FREYR Battery SA
Performance |
| Timeline |
| CBAK Energy Technology |
| FREYR Battery SA |
CBAK Energy and FREYR Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBAK Energy and FREYR Battery
The main advantage of trading using opposite CBAK Energy and FREYR Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBAK Energy position performs unexpectedly, FREYR Battery 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 FREYR Battery will offset losses from the drop in FREYR Battery's long position.| CBAK Energy vs. Pioneer Power Solutions | CBAK Energy vs. Ocean Power Technologies | CBAK Energy vs. Ideal Power | CBAK Energy vs. Expion360 |
| FREYR Battery vs. Solid Power | FREYR Battery vs. Enovix Corp | FREYR Battery vs. Microvast Holdings | FREYR Battery vs. LiCycle Holdings Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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