Correlation Between CBAK Energy and Solid Power
Can any of the company-specific risk be diversified away by investing in both CBAK Energy and Solid Power 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 Solid Power 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 Solid Power, you can compare the effects of market volatilities on CBAK Energy and Solid Power 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 Solid Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBAK Energy and Solid Power.
Diversification Opportunities for CBAK Energy and Solid Power
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CBAK and Solid is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CBAK Energy Technology and Solid Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Power 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 Solid Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Power has no effect on the direction of CBAK Energy i.e., CBAK Energy and Solid Power go up and down completely randomly.
Pair Corralation between CBAK Energy and Solid Power
Given the investment horizon of 90 days CBAK Energy Technology is expected to under-perform the Solid Power. In addition to that, CBAK Energy is 1.29 times more volatile than Solid Power. It trades about -0.06 of its total potential returns per unit of risk. Solid Power is currently generating about -0.07 per unit of volatility. If you would invest 181.00 in Solid Power on August 28, 2024 and sell it today you would lose (65.00) from holding Solid Power or give up 35.91% 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. Solid Power
Performance |
| Timeline |
| CBAK Energy Technology |
| Solid Power |
CBAK Energy and Solid Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBAK Energy and Solid Power
The main advantage of trading using opposite CBAK Energy and Solid Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBAK Energy position performs unexpectedly, Solid Power 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 Solid Power will offset losses from the drop in Solid Power's long position.| CBAK Energy vs. Bloom Energy Corp | CBAK Energy vs. Eos Energy Enterprises | CBAK Energy vs. Sunrise New Energy | CBAK Energy vs. GrafTech International |
| Solid Power vs. Plug Power | Solid Power vs. FREYR Battery SA | Solid Power vs. FuelCell Energy | Solid Power 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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