Correlation Between Chardan NexTech and FREYR Battery
Can any of the company-specific risk be diversified away by investing in both Chardan NexTech and FREYR Battery 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 Chardan NexTech and FREYR Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chardan NexTech Acquisition and FREYR Battery SA, you can compare the effects of market volatilities on Chardan NexTech and FREYR Battery 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 Chardan NexTech with a short position of FREYR Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chardan NexTech and FREYR Battery.
Diversification Opportunities for Chardan NexTech and FREYR Battery
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chardan and FREYR is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Chardan NexTech Acquisition and FREYR Battery SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREYR Battery SA and Chardan NexTech 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 Chardan NexTech Acquisition are associated (or correlated) with FREYR Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREYR Battery SA has no effect on the direction of Chardan NexTech i.e., Chardan NexTech and FREYR Battery go up and down completely randomly.
Pair Corralation between Chardan NexTech and FREYR Battery
Given the investment horizon of 90 days Chardan NexTech Acquisition is expected to under-perform the FREYR Battery. But the stock apears to be less risky and, when comparing its historical volatility, Chardan NexTech Acquisition is 1.86 times less risky than FREYR Battery. The stock trades about -0.11 of its potential returns per unit of risk. The FREYR Battery SA is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 105.00 in FREYR Battery SA on August 27, 2024 and sell it today you would earn a total of 118.00 from holding FREYR Battery SA or generate 112.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chardan NexTech Acquisition vs. FREYR Battery SA
Performance |
| Timeline |
| Chardan NexTech Acqu |
| FREYR Battery SA |
Chardan NexTech and FREYR Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chardan NexTech and FREYR Battery
The main advantage of trading using opposite Chardan NexTech and FREYR Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chardan NexTech position performs unexpectedly, FREYR Battery 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 FREYR Battery will offset losses from the drop in FREYR Battery's long position.| Chardan NexTech vs. Polar Power | Chardan NexTech vs. Eos Energy Enterprises | Chardan NexTech vs. Sunrise New Energy | Chardan NexTech vs. AFC Energy plc |
| FREYR Battery vs. Solid Power | FREYR Battery vs. Enovix Corp | FREYR Battery vs. Microvast Holdings | FREYR Battery vs. LiCycle Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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