Correlation Between Cepton and Acorn Energy
Can any of the company-specific risk be diversified away by investing in both Cepton and Acorn 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 Cepton and Acorn Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Acorn Energy, you can compare the effects of market volatilities on Cepton and Acorn 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 Cepton with a short position of Acorn Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Acorn Energy.
Diversification Opportunities for Cepton and Acorn Energy
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cepton and Acorn is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Acorn Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acorn Energy and Cepton 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 Cepton Inc are associated (or correlated) with Acorn Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acorn Energy has no effect on the direction of Cepton i.e., Cepton and Acorn Energy go up and down completely randomly.
Pair Corralation between Cepton and Acorn Energy
If you would invest 262.00 in Cepton Inc on August 27, 2024 and sell it today you would earn a total of 50.00 from holding Cepton Inc or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.53% |
| Values | Daily Returns |
Cepton Inc vs. Acorn Energy
Performance |
| Timeline |
| Cepton Inc |
| Acorn Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cepton and Acorn Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Acorn Energy
The main advantage of trading using opposite Cepton and Acorn Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton position performs unexpectedly, Acorn 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 Acorn Energy will offset losses from the drop in Acorn Energy's long position.The idea behind Cepton Inc and Acorn Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Acorn Energy vs. Mind Technology | Acorn Energy vs. Cepton Inc | Acorn Energy vs. SaverOne 2014 Ltd | Acorn Energy vs. Fortive 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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