Correlation Between CBAK Energy and Orion Energy
Can any of the company-specific risk be diversified away by investing in both CBAK Energy and Orion 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 Orion 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 Orion Energy Systems, you can compare the effects of market volatilities on CBAK Energy and Orion 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 Orion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBAK Energy and Orion Energy.
Diversification Opportunities for CBAK Energy and Orion Energy
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CBAK and Orion is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CBAK Energy Technology and Orion Energy Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Energy Systems 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 Orion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Energy Systems has no effect on the direction of CBAK Energy i.e., CBAK Energy and Orion Energy go up and down completely randomly.
Pair Corralation between CBAK Energy and Orion Energy
Given the investment horizon of 90 days CBAK Energy Technology is expected to generate 1.31 times more return on investment than Orion Energy. However, CBAK Energy is 1.31 times more volatile than Orion Energy Systems. It trades about -0.15 of its potential returns per unit of risk. Orion Energy Systems is currently generating about -0.23 per unit of risk. If you would invest 110.00 in CBAK Energy Technology on August 31, 2024 and sell it today you would lose (15.00) from holding CBAK Energy Technology or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBAK Energy Technology vs. Orion Energy Systems
Performance |
| Timeline |
| CBAK Energy Technology |
| Orion Energy Systems |
CBAK Energy and Orion Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBAK Energy and Orion Energy
The main advantage of trading using opposite CBAK Energy and Orion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBAK Energy position performs unexpectedly, Orion 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 Orion Energy will offset losses from the drop in Orion 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 |
| Orion Energy vs. Plug Power | Orion Energy vs. FREYR Battery SA | Orion Energy vs. FuelCell Energy | Orion Energy vs. Enovix 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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