Correlation Between Cepton and Energous
Can any of the company-specific risk be diversified away by investing in both Cepton and Energous 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 Energous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Energous, you can compare the effects of market volatilities on Cepton and Energous 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 Energous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Energous.
Diversification Opportunities for Cepton and Energous
Excellent diversification
The 3 months correlation between Cepton and Energous is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Energous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energous 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 Energous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energous has no effect on the direction of Cepton i.e., Cepton and Energous go up and down completely randomly.
Pair Corralation between Cepton and Energous
Assuming the 90 days horizon Cepton Inc is expected to generate 1.44 times more return on investment than Energous. However, Cepton is 1.44 times more volatile than Energous. It trades about -0.08 of its potential returns per unit of risk. Energous is currently generating about -0.26 per unit of risk. If you would invest 1.11 in Cepton Inc on August 28, 2024 and sell it today you would lose (0.11) from holding Cepton Inc or give up 9.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cepton Inc vs. Energous
Performance |
| Timeline |
| Cepton Inc |
| Energous |
Cepton and Energous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Energous
The main advantage of trading using opposite Cepton and Energous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton position performs unexpectedly, Energous 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 Energous will offset losses from the drop in Energous' long position.| Cepton vs. Cepton Inc | Cepton vs. Thayer Ventures Acquisition | Cepton vs. Anghami Warrants | Cepton vs. Inspirato |
| Energous vs. Cepton Inc | Energous vs. SaverOne 2014 Ltd | Energous vs. Kraken Robotics | Energous vs. Focus Universal |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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