Correlation Between CBAK Energy and Signify NV
Can any of the company-specific risk be diversified away by investing in both CBAK Energy and Signify NV 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 Signify NV 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 Signify NV, you can compare the effects of market volatilities on CBAK Energy and Signify NV 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 Signify NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBAK Energy and Signify NV.
Diversification Opportunities for CBAK Energy and Signify NV
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CBAK and Signify is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CBAK Energy Technology and Signify NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signify NV 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 Signify NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signify NV has no effect on the direction of CBAK Energy i.e., CBAK Energy and Signify NV go up and down completely randomly.
Pair Corralation between CBAK Energy and Signify NV
Given the investment horizon of 90 days CBAK Energy Technology is expected to generate 2.17 times more return on investment than Signify NV. However, CBAK Energy is 2.17 times more volatile than Signify NV. It trades about 0.02 of its potential returns per unit of risk. Signify NV is currently generating about -0.03 per unit of risk. If you would invest 96.00 in CBAK Energy Technology on November 5, 2024 and sell it today you would lose (3.00) from holding CBAK Energy Technology or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.99% |
| Values | Daily Returns |
CBAK Energy Technology vs. Signify NV
Performance |
| Timeline |
| CBAK Energy Technology |
| Signify NV |
CBAK Energy and Signify NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBAK Energy and Signify NV
The main advantage of trading using opposite CBAK Energy and Signify NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBAK Energy position performs unexpectedly, Signify NV 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 Signify NV will offset losses from the drop in Signify NV's long position.| CBAK Energy vs. Pioneer Power Solutions | CBAK Energy vs. Ocean Power Technologies | CBAK Energy vs. Ideal Power | CBAK Energy vs. Expion360 |
| Signify NV vs. Tantalus Systems Holding | Signify NV vs. AFC Energy plc | Signify NV vs. Loop Energy | Signify NV vs. CBAK Energy Technology |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |